MASTER 

NEGATIVE 
NO.  94-82082- 14 


COPYRIGHT  STATEMENT 


The  copyright  law  of  the  United  States  (Title  17,  United  States  Code) 
governs  the  making  of  photocopies  or  other  reproductions  of  copyrighted 
materials  including  foreign  works  under  certain  conditions.  In  addition, 
the  United  States  extends  protection  to  foreign  works  by  means  of 
various  international  conventions,  bilateral  agreements,  and 
proclamations. 

Under  certain  conditions  specified  in  the  law,  libraries  and  archives  are 
authorized  to  furnish  a  photocopy  or  other  reproduction.  One  of  these 
specified  conditions  is  that  the  photocopy  or  reproduction  is  not  to  be 
"used  for  any  purpose  other  than  private  study,  scholarship,  or  research." 
If  a  user  makes  a  request  for,  or  later  uses,  a  photocopy  or  reproduction 
for  purposes  in  excess  of  "fair  use,"  that  user  may  be  liable  for  copyright 
infringement. 

The  Columbia  University  Libraries  reserve  the  right  to  refuse  to  accept  a 
copying  order  if,  in  its  judgement,  fulfillment  of  the  order  would  involve 
violation  of  the  copyright  law. 


Author: 


Bloomfield  &  Bloomfield 


Title : 


Stock  participation  plans 
for  employees 

Place: 

Boston 

Date: 

[1 922] 


MASTER   NEGATIVE  * 


COLUMBIA  UNIVERSITY  LIBRARIES 
PRESERVATION  DIVISION 

BIBLIOGRAPHIC  MICROFORM  TARGET 


ORIGINAL  MATERIAL  AS  FILMED  -    EXISTING  BIBLIOGRAPHIC  RECORD 


268 
B62 


I 


Bloomfield  &  Bloomiield. 

Stock  participation  plans  for  employees;  a  survey  by 
Industrial  relations,  Bloomfield 's  labor  digest.  Boston, 
Mass.,  Bloomfield  &  Bloomfield,  U922. 


18  numb.  1.     forms.    27i 
Type-written. 


cm 


Library  of  Congress 
Copyright    A  658913 


n 


HD2985.B5 
r2i 


22-15501 


m 


RESTRICTIONS  ON  USE: 


TECHNICAL  MICROFORM  DATA 


FILM  SIZE 


:        S^ 


»tiM 


DATE  FILMED: 


TRACKING  #  : 


REDUCTION  RATIO: 


I2x 


IMAGE  PLACEMENT:(|IA;  HA     IB     MB 


5\\h\^A 


INITIALS: 


W^\a/ 


Msi\o(ms^ 


FILMED  BY  PRESERVATION  RESOURCES.  BETHLEHEM,  PA. 


> 

CD 
O 
O 


O 


O 

lO 

c/> 


X 


CJ1 

3 


> 

CD 
0,0 

o  m 


(D  CD 

OQ 


--J  o  O 

CO 


N 


X 

M 


oK 


A^^ 


^'^ja,   ^^-X). 


<V^ 


III 

3 


.'C^^ 


> 


.^Z 


8 


O 


r"i5i;EiJ|5|; 


bo 


a 


00 


O 


I 


ro 
In 


1.0  mm 


1.5  mm 


2.0  mm 


ABCDEFGHIJKLMNOPQRSTUVWXYZ 
abcclefghi|klmnopqrstuv¥»xy2l234567890 


ABCDEFGHIJKLMNOPQRSTUVWXYZ 
abcdefghijklmnopqrstuvwxyzl234567890 


ABCDEFGHIJKLMNOPQRSTUVWXYZ 

abcdefghijklmnopqrstuvwxyz 

1234567890 


2.5  mm 


ABCDEFGHIJKLMNOPQRSTUVWXYZ 

abcdefghijklmnopqrstuvwxyz 

1234567890 


^^ 


\<k      -^-r. 


^xr 


fc? 


m 

H 

O 
O 

■o  m  "o 

>  C  CO 

z  ^  ^ 
s  Ooo 
"CO    2 

m 

30 
O 

m 


^^ 


^o 


3 
3 


o 

3 
3 


11 

P 
-I 

•—-I 
o»x 

00 IM 


2c: 


S 


8 


^  JO 

M  (/J 

»-— « 

cr»x 

00  Nl 


s 


'*--^liS 


ir  '.-^ 


^in 


Stock  Participation  Plans 
for  Employees 


Ci'OOL  OF  BUSINESS 


A  Survey  by 

Industrial   Relations 
Bloomfield's  Labor  Digest 


Copyright  1922.     All  rights  reserved. 

BLOOMFIELD  &  BLOOMFIELD 

Consultants  in  Industrial  Relations 
6  BEACON  STREET,  BOSTON  9,  MASS. 


■W^-^, 


-^^ 


»*•»« 


~^^ 


'^Q>'e> 


LIBRARY 


School  of  Business 


Stock  Participation  Plans 
for  Employees 


A  Survey  by 

Industrial  Relations 
Bloomfield's  Labor  Digest 


Copyright  1922.     All  rights  reserved. 

BLOOMFIELD  &  BLOOMFIELD 

Consultants  in  Industrial  Relations 
6  BEACON  STREET,  BOSTON  9,  MASS. 


"KLv-/' 


i  " 


t.~L 


3 


pi 


i 


7  -^ 


INDEX 


/ 


'      \ 


Introduction    3 

Make  Your  Plan  Clear 3 

Taking  Part  in  the  Enterprise 4 

Do  Not  Mix  Stock  and  Bonus 4- 

When   Employee  Leaves ^ 

Analysis  of  the  Plans ^ 

Type  I. — Stock  Sold  at  Market  Value 5 

Guarantee  of  Future  Value 6 

Bonuses  on  Stock  Purchases 6 

Studebaker  Co. — Partnership  Plan 7 

Type  II. — Stock  Sold  at  Par  or }  g 

Type  III.— Stock  Sold  at  a  Discount ) 

United  States  Steet.  Corporation  Plan 10 

Subscriptions  to  the  Common  Stock H 

Payment  for  Stock 1* 

Dividends  1* 

Cancellations — Refund  of  Installments H 

Special   Benefits ^2 

Additional  Compensation   ^2 

Death  or  Permanent  Disability 12 

Pensioned  Employees   13 

Beneficiary    1^ 

Suspension  of  Employment 13 

W.  H.  McElwain  Co.  Plan 14 

Type  IV. — Stock  Given  to  Employees 15 

Dennison  Industrial  Partnership  Plan 16 

Gifts  of  Stock 18 

Summary   18 


A  Survey  of  Stock  Participation  Plans  for  Employees* 

[Specially  Prepared  by  INDUSTRIAL  Relations,  Bloomfield's  Labor  Digest.] 

Many  employers  are  experimenting  with  stock  participation  in  the  hope  that 
thereby  will  he  secured  the  active  interest  of  their  employee-stockholders 
through  creating  a  sense  of  proprietorship  in  the  business.   Also  stock  partici- 
pation is  often  urged  in  place  of  the  ordinary  profit-sharing  schemes  because 
in  the  former  the  possibility  of  "loss  sharing"  is  added,  whereas  it  has  been 
found  practically  impossible  to  attach  loss  sharing  features  to  the  common 
profit-sharing  plans.   It  is  urged  in  some  quarters  that  the  employee  will  be 
encouraged  to  work  with  much  greater  zeal  if  he  foresees  the  possible  loss  of 
dividends  than  if  he  sees  merely  extra  profits  with  no  chance  of  losses. 

There  are  two  general  classes  of  stock  participation  plans,  those  that  re- 
quire payments  out  of  wages  for  the  stock  (whether  paid  for  in  full  or  not),  and 
those  that  give  the  stock  to  the  employee  either  directly  as  a  bonus,  or  take 
such  bonus  money  as  is  not  a  real  part  of  wages  in  payment  for  stock. 

Unfortunately  the  former  type  is  difficult  to  work  successfully  unless  it  is 
presented  as  an  investment  plan.   Many  concerns  with  such  plans  limit  them  to 
salaried  officials  who  have  larger  incomes  and  can  be  presumed  to  be  able  to 
justify  taking  this  financial  risk  with  a  small  part  of  the  income  if  they  so 
choose.   They  also  may  be  presumed  to  under^stand  better  the  nature  of  the  risk 
they  are  taking. 

Make  Your  Plan  Clear 

When  an  employer  sells  or  gives  stock  of  the  company  to  his  employees,  the 
action  should  be  clear-cut.   There  should  be  no  attempt  to  conceal  the  nature 
of  the  transaction.   To  anyone  acquainted  with  financial  matters  the  distinction 
between  putting  money  in  a  business  and  investing  it  for  safety  is  too  obvious 
to  require  definition.   But  to  the  ordinary  employee  this  distinction  not  only 
is  obscure  but  often  is  beyond  comprehension.   When  the  employer  puts  his  stock 
participation  scheme  before  his  employees  as  a  thrift  plan  or  investment,  there- 
fore, there  is  every  probability  that  it  will  be  taken  at  its  face  value  until 
the  real  nature  of  the  risk  is  called  forcibly  to  the  attention  of  the  employees 
by  untoward  conditions.   In  creating  the  impression  that  a  stock  participation 
plan  is  in  the  nature  of  a  thrift  scheme  the  employer  is  not  only  assuming  a 
grave  moral  responsibility  for  the  savings  of  his  employees  but  he  is  doing  an 
act  of  very  doubtful  expediency. 

One  experience  such  as  the  employee-stockholders  of  a  certain  large 
industrial  company,  for  instance,  have  had  since  the  war  in  the  collapse  of 


^Copyrighted  1922  by  Meyer  Bloomfield  and  Daniel  Bloomfield.  AU  rights  strictly  reserved 


(4) 

the  value  of  their  investments  in  a  financial  crisis,  nullifies  the  educational 
value  of  encouragement  of  real  investments  of  savings  in  a  hundred  sound  thrift 
plans  and  shakes  the  confidence  of  people  of  slender  means  all  over  the  country 
in  investing  their  savings.   A  multiplication  of  such  experience  would 
surely  tend  to  drive  the  pennies  of  the  poor  hack  into  their  stockings. 

There  is  every  reason  to  "believe  that  plans,  properly  presented  in  their 
true  light,  would  prove  of  incalculahle  service  towards  the  realization  of  the 
ideal  of  co-operation  between  employers  and  employees  and  also  of  immense 
educational  value  in  teaching  the  fundamentals  of  industrial  economics. 

Taking  Part  in  the  Enterprise 

It  is  conceivable  that  if  stock  participation  plans  were  presented  in  such 
a  light  that  their  failures  would  serve  as  object  lessons  of  the  financial 
risks  of  business  instead  of  occurrences  to  be  apologized  for,  and  their 
successes  always  explained  as  periods  when  surpluses  must  be  built  up  for  the 
"seven  lean  years  to  come"  the  teaching  would  be  normal  and  wholesome.   But 
apart  from  such  possibilities  there  is  the  immediate  advantage  of  having 
employees  feel  that  they  are  taking  a  real  part  in  the  proprietorship  of  the 
company  and  are  in  a  position  to  participate  in  its  successes.   Wherever  this 
spirit  is  implanted  in  a  body  of  employees  it  is  a  poor  manager  indeed  who 
cannot  realize  at  least  a  fair  proportion  of  successful  years. 


Do  Not  Mix  Stock  and  Bonus 

Provided  the  dividends  on  the  stock  are  not  mixed  with  and  concealed  by 
bonuses  and  other  gifts  from  the  company,  so  that  a  true  measure  of  the 
success  of  the  concern  is  apparent,  this  point  can  be  brought  very  clearly 
before  the  employees.   If  bonuses  are  also  given  they  should  be  kept  quite 
distinct  in  order  to  allow  the  plan  to  tell  its  complete  story  to  the  stock- 
holders.  This  applies  in  the  case  of  salaried  officials  as  well  as  all  ranks 
of  employees,  for  a  lesson  to  be  fully  understood  must  be  presented  in  the 
clearest  form  possible  and  not  be  beclouded  by  side  issues. 

When  the  Employee  Leaves 

A  complicated  question  always  arises  with  regard  to  repurchasing  the  stock 
or  refunding  partial  payments  in  case  the  employee  leaves  the  service.   When 
the  stock  has  been  given  outright,  as  is  done  at  the  Dennison  Manufacturing 
Company,  usually  a  special  class  of  stock  for  employees  is  created  which  has  no 
market  value.   In  such  cases  either  cash  is  given  for  the  stock  or  else  it  is 
replaced  at  an  agreed  ratio  by  another  class  of  stock  which  is  marketable,  when 
the  holder  leaves  the  service.   When  marketable  issues  on  the  other  hand  are 
distributed  either  gratuitiously  or  for  partial  or  complete  payments  it  is 
merely  a  question  of  expediency  whether  it  shall  be  repurchased  by  the  company 
or  not.   If  the  employee  has  received  his  shares  with  full  understanding  that 
they  represent  an  investment  in  a  business  venture  there  would  seem  to  attach 


(5) 

to  the  plan  no  moral  olDligation  on  the  employer  to  "buy  iDack  the  stock  at  par 
or  at  the  original  price  if  the  market  value  has  declined  since  the  purchase. 
Certainly  the  company  seldom  will  "be  called  upon  to  repurchase  at  the  original 
price  if  the  market  value  has  risen. 

The  payment  of  a  honus  to  employees  who  have  purchased  or  have  "been  given 
marketahle  stock,  and  who  hold  it  during  the  year,  is  sometimes  thought  to  be 
necessary  in  order  to  induce  the  employees  to  continue  to  hold  it.   Strangely 
enough  experience  on  this  point  indicates  that  employees  more  often  sell  in 
panic  if  there  is  a  sudden  drop  in  market  value  in  order  to  protect  their 
savings  from  further  shrinkage,  than  sell  on  a  rising  market  to  realize  profits. 
This  merely  proves  more  pointedly  that  employees  usually  consider  stock  purchase 
as  an  investment  of  savings  and  act  accordingly. 


Analysis  of  the  Plans 


'For   the  purposes  of  this  study,  special  information  of  ahout  eighty-three 
plans  for  selling  stock  to  employees  has  heen  secured.   These  have  "been  classi- 
fied according  to  the  "basis  on  which  the  employees  secured  the  stock,  whether 
at  market  value,  par  value,  a  discount  from  the  prevailing  rates,  or  as  a  gift. 

TYPE  I.— STOCK  SOLD  AT  MARKET  VALUE 

Twenty-one  plans  have  "been  analyzed  in  which  companies  sell  stock  to  their 
employees  at  market  value.   Only  two  of  them  were  started  "before  1918.   In  every 
case  "but  one,  the  railroads  which  have  stock-selling  schemes  disposed  of  shares 
on  this  "basis.   The  New  York  Central  Railroad  Company,  for  instance,  in  offering 
its  employees  an  opportunity  to  buy  stock  on  easy  terms,  states  that  "inasmuch 
as  all  the  stock  issued  is  in  the  hands  of  the  pu'blic,  the  company  has  none 
for  sale,  and  will  arrange  for  the  purchase  of  the  stock,  ordered  under  the 
plan,  in  the  open  market." 


The  various  schemes  on  the  whole  follow  similar  lines.   Usually  an  employee 
may  participate  regardless  of  his  position,  "but  a  short  period  of  service  is  not 
infrequently  required.   The  Hydraulic  Steel  Company  of  Cleveland  stipulates 
three  months,  the  Hilo  Varnish  Company  of  Brooklyn,  five  years.   Three  to  six 
months  is  more  common  than  any  longer  time.   The  Hydraulic  Steel  Company  is 
unique  in  limiting  the  stock-'buying  privilege  to  American  citizens  or  aliens 
who  have  taken  out  first  papers.   Some  companies  extend  it  according  to  the 
"judgment  of  the  management"  (Standard  Parts  Company,  Cleveland)  or  to  "selected 
employees  (Thomas  Devlin  Manufacturing  Company,  Burlington,  N.  J.).   Procter 
&   Gam"ble  covers,  in  the  more  li"beral  of  its  stock-selling  plans,  only  those 
receiving  pay  under  $2,000  a  year  and  excludes  salesmen  and  traveling  repre- 
sentatives.  Common  stock  is  the  usual  type  offered  and  a  definite  block  of 
several  thousand  shares  is  often  set  aside  for  the  purpose. 


(6) 

In  these  cases  in  which  stock  is  sold  at  market  value,  a  chief  point  made 
to  the  employees  is  the  fact  that  they  can  pay  for  their  purchases  on  the 
installment  plan.  A  small  initial  payment  may  or  may  not  be  required. 
Thereafter  small  weekly  or  monthly  deductions  from  pay  are  made  until  the  stock 
is  paid  for.   $1.00  per  share  per  month  is  a  figure  often  fixed.   Interest  is 
charged  on  unpaid  balances  and  dividends  credited  against  them,  while  the  stock 
generally  remains  in  the  hands  of  the  company  until  it  is  entirely  paid  for. 
The  largest  amount  of  stock  which  employees  may  "buy  under  these  plans  is  usually 
prescribed.  A  number  of  shares  may  be  fixed,  varying  according  to  wages  or  some 
such  specification  may  be  made  as  that  the  amount  purchased  shall  not  be  greater 
than  the  annual  salary.   The  limits  permitted  may  be  very  low,  as  two  to  ten 
shares  according  to  wages. 

Guarantees  of  Future  Value 

Guarantees  of  future  value  are  seldom  found.   The  Gulf  Coast  Lines 
guarantee  the  maintenance  of  six  per  cent  dividends  while  the  stock  is  being 
paid  for,  the  Thomas  Devlin  Company  guarantees  value  during  the  same  period, 
and  Procter  &  Gamble  offers  to  return  the  money  paid  in,  plus  six  per  cent  inter- 
est if  the  stock  falls  below  cost  within  six  years  from  date  of  purchase.   On 
the  other  hand,  the  New  York  Central  expressly  disclaims  any  guarantee  as  to 
future  dividends  or  value. 

Arising  from  the  necessity  of  keeping  the  control  of  the  company  in  approved 
hands  comes  an  occasional  provision  such  as  is  found  in  the  plan  of  the  i'uller 
&  Smith  advertising  agency  of  Cleveland,  that  an  employee  wishing  to  sell  his 
stock  must  allow  the  company  an  option  on  its  purchase  at  the  cost  to  him  plus 
ten  per  cent. 

Elaborate  provisos  are  included  in  the  plans  as  to  the  return  of  payments, 
if  the  employee  leaves  the  company,  dies,  or  wishes  to  discontinue  buying  shares 
before  his  purchase  is  entirely  paid  for.   The  clauses  arrange  for  the  return 
of  all  money  paid  in  with  a  fair  amount  of  interest  -  four  to  six  per  cent. 

Bonuses  on  Stock  Purchases 

Some  companies  attempt  to  increase  the  desire  of  their  employees  to  buy 
stock  by  giving  special  financial  inducements  over  and  above  the  dividends. 
Procter  &  Gamble,  in  their  scheme  for  semi-skilled  employees,  make  one  of  the 
most  liberal  of  such  offers.   It  credits  a  profit-sharing  dividend  of  ten  per 
cent  of  wages  if  the  employee  has  had  one  year  of  service  rising  gradually  to 
twenty  per  cent  for  ten  years'  service  toward  the  cost  of  the  stock.   More  often 
the  bonus  takes  some  such  form  as  with  the  Hercules  Powder  Company  which  gives 
the  employee  who  remains  with  the  company,  and  holds  his  stock  five  years,  |4.00 
a  share  a  year.   The  Trumbull  Steel  Company  donates  a  lump  sum  of  $7.00  per 
share  to  employees  holding  their  shares  for  five  years. 

The  following  "Co-Partnership  Plan"  of  the  Studebaker  Corporation  is  typical 
of  the  more  liberal  of  the  methods  by  which  stock  is  sold  to  employees  at 
market  value. 


(7) 


Studebaker  Co-Partnership  Plan 

In  addition  to  the  plans  under  which  regular  employees  receive  anniversary 
checks,  annual  vacations,  pensions  and  life  insurance,  the  directors  offer  this 
opportunity  wherehy  employees  may  hecome  co-partners  in  the  "business,  and  share 
to  a  still  greater  extent,  as  stockholders,  in  the  profits  resulting  from  its 
operations.   The  directors  Relieve  that  a  large  increase  in  the  number  of 
employee-stockholders  will  develop  the  relation  of  co-partnership  in  its 
broadest  sense. 

The  plan  is  as  follows: 

1.  Continuous  service  is  necessary  to  entitle  employees  to  purchase  stock 
of  the  corporation  under  the  liberal  terms  of  this  plan,  although  absence  of 
thirty  days  or  less  due  to  sickness,  vacations,  suspension  of  operations,  or 
leave  of  absence  will  not  be  regarded  as  interruptions  of  continuous  service. 
Absences  without  leave,  aggregating  six  full  working  days  or  more  in  employee's 
anniversary  year,  will  operate  as  a  rupture  of  continuous  service.   Employees 
who  have  been  absent  in  the  war  service  will  not,  thereby,  affect  their  con- 
tinuous service  record. 


2.  Employees  who  have  been  in  the  service  of  the  corporation  for  three 
months  or  more  may  have  common  or  preferred  stock  purchased  annually  for  them 
by  the  corporation  for  their  account,  in  an  amount  not  exceeding  three  hundred 
($300.00)  dollars  market  value  of  the  stock  at  the  time  of  the  purchase,  and  in 
the  aggregate  not  exceeding  five  (5)  shares  of  stock,  but  in  neither  case  to 
exceed  twenty  per  cent  (205^)  of  their  annual  rate  of  earnings. 

3.  Applications  for  purchase  of  stock  must  be  accompanied  by  an  initial 
payment  of  ten  per  cent  of  the  estimated  purchase  price,  and  the  remaining 
forty  per  cent  thereof,  which  is  payable  by  employees,  must  be  paid  in  four 
years  in  installments  of  one-fifteenth  of  the  amount  every  three  months  after 
the  date  of  purchase. 

4.  The  corporation  will  fully  absorb  the  remaining  fifty  per  cent  of  the 
cost  of  the  stock  (provided  employees  keep  up  their  payments  and  remain  in  its 
service  continuously  for  four  years)  by  crediting  employees'  accounts  every 
three  months  with  one-sixteenth  of  its  half  of  the  cost  of  stock  purchased. 

5.  The  following  table  (which  for  simplicity  excludes  interest  charges  and 
dividend  credits)  shows  an  example  of  how  payments  by  employees  and  credits  by 
the  corporation  will  be  made,  assuming  an  employee  bought  one  share  of  common 
stock  on  September  1,  1920,  at  a  cost  of  $100  per  share. 


(8) 

(On  a  percentage  "basis  this  tahle  will  show  the  ajnount  of  quarterly  payment 
and  quarterly  credit  for  a  share  of  stock  at  any  market  price.) 


50$f  Payable 

by 

505f  Payable  ' 

by 

Dates  of 

Employee 

C 

lorporation 

Paymer 

its  and 
redits 

$50  Total 

$50  Total 

of  C] 

i 

Amt. 

Total 

i 

Amt. 

Total 

Sept.  1, 

,  1920 
,    1920 
,  1921 

10 
1.15th 
1.15th 

$10.00 
2.67 
2.67 

Dec.   1, 

$12.67 
15.34 

1.16th 
1.16th 

$3.13 
3.13 

Mar.   Ij 

$6.26 

June  1 , 

,  1921 

1.15th 

2.67 

18.01 

1.16th 

3.13 

9.39 

Sept.  1, 

,    1921 

1.15th 

2.67 

20.68 

1.16th 

3.13 

12.52 

Dec.   1, 

,    1921 

1.15th 

2.67 

23.35 

1.16th 

3.13 

15.65 

Mar.   Ij 

,  1922 

1.15th 

2.67 

26.02 

1.16th 

3.13 

18.78 

June  Ij 

,    1922 

1.15th 

2.67 

28.69 

1.16th 

3.13 

21.91 

Sept.  1 

,  1922 

1.15th 

2.67 

31.36 

1.16th 

3.13 

25.04 

Dec.   1 

,  1922 

1.15th 

2.67 

34.03 

1.16th 

3.13 

28.17 

Mar.   1, 

,  1923 

1.15th 

2.67 

36.70 

1.16th 

3.13 

31.30 

June  1 

,    1923 

1.15th 

2.67 

39.37 

1.16th 

3.13 

34.43 

Sept.  1 

,    1923 

1.15th 

2.67 

42.04 

1.16th 

3.13 

37.56 

Dec.   1 

,  1923 

1.15th 

2.67 

44.71 

1.16th 

3.13 

40.69 

Mar.   1 

,  1924 

1.15th 

2.67 

47.38 

1.16th 

3.13 

43.82 

June  1 

,  1924 

1.15th 

2.62 

50.00 

1.16th 

3.13 

46.95 

Sept.  1, 

,    1924 

1.16th 

3.05 

50.00 

Total 

L 

$50.00 

$50.00 

6.  Prom  the  above  table  it  will  be  seen  that  should  an  employee  withdraw 
from  this  plan  on  September  1,  1922,  after  two  years  participation,  he  would 
have  paid  $31.36,  and  his  credit  from  the  corporation  would  be  $25.04,  making  a 
total  of  $56.40  against  the  original  cost  of  the  stock,  viz.,  $100.00,  leaving 
an  unpaid  balance  of  $43.60.   He  could  pay  this  balance  and  receive  his  stock 
or,  if  he  so  desired,  he  could  order  his  stock  sold  at  the  then  prevailing 
market  price  and  receive  cash  for  the  balance  to  his  credit.   If,  for  example, 
the  stock  was  sold  for  $110.00  per  share,  he  would  receive  $66.40,  which  would 
be  the  $31.36  he  had  paid,  plus  $35.04,  consisting  of  $25.04  in  credits  from 
the  corporation,  and  $10  in  profit  from  the  sale  of  the  stock. 


7.  All  stock  purchased  under  this  plan  will  be  charged  to  emj^loyees' 
accounts  at  cost,  and  interest  will  be  charged  quarterly  at  the  rate  of  six 
per  cent  per  year  on  the  unpaid  balance  of  the  purchase  price,  after  deducting 
payments  by  employees,  and  credits  by  the  corporation.  All  cash  dividends 
(and  stock  dividends  paid  on  the  common  stock)  will  be  credited  to  the  accounts 
of  employees  and  the  excess  of  dividend  credits  over  interest  charges  will  act 
as  a  reduction  in  the  amount  of  the  final  payment  to  be  made  by  employees  in 
the  last  year. 


(9) 

8.  Stock  certificates  purchased  for  the  account  of  employees  will  "be  held 
by  the  corporation  in  its  name  until  the  expiration  of  the  fourth  year  when,  if 
payments  are  completed,  they  will  he  delivered  to  employees. 

9.  Fractional  shares  will  not  "be  purchased  for  employees  or  delivered  to 
them  upon  settlement  of  their  accounts. 

10.  Employees  will  not  "be  allowed  to  assign  or  transfer  their  rights  to 
stock  undelivered  under  this  plan,  which  rights  are  personal  and  contingent 
upon  continuous  service. 

11.  As  participation  in  this  plan  is  voluntary  and  in  no  way  compulsory, 
employees  may,  at  any  time,  withdraw  from  participation,  in  which  event  the 
credits  by  the  corporation  will  cease  as  of  the  quarterly  date  preceding 
withdrawal,  and  will  be  forfeited  altogether  if  the  withdrawal  is  made  inside 
of  six  months  from  the  date  stock  was  purchased.   Employees  who  withdraw 
within  six  months  shall  receive  the  actual  amount  paid  in  by  them,  without 
deductions  or  additions.  Employees  who  withdraw  after  six  months  may  either 
(1)  pay  the  balance  due  on  the  purchase  price  of  their  stock  and  receive  stock 
certificate,  or  (2)  authorize  the  sale  of  stock  held  for  them  at  the  prevailing 
market  price,  and  receive  in  cash  the  balance  due  them,  if  any,  consisting  of 
the  difference  between  the  original  cost  of  the  stock,  plus  interest  charges, 
and  the  payments  by  employees,  credits  by  the  corporation,  dividends,  and  sales 
proceeds  of  their  stock.   Employees  withdrawing  from  the  plan  shall  not  be 
permitted  to  renew  participation  within  one  year  thereafter. 

12.  Employees  who  resign  or  are  dismissed,  or  who  fail  to  maintain  their 
installment  payments  when  due,  will  automatically  be  withdrawn  from  the  plan 
on  the  same  basis  as  above  provided  for  voluntary  withdrawal. 

13.  In  the  event  of  the  death  of  a  participating  employee,  his  heirs  or 
legal  representatives  may  pay  the  balance  due  on  his  stock,  either  in  full  or 
in  installments,  and  receive  stock  certificates,  or  may  authorize  its  sale  on 
the  terms  herein  provided  for  voluntary  withdrawals. 

14.  Should  this  plan  be  permanently  discontinued  as  of  December  31,  1921, 
uncompleted  stock  purchase  transactions  then  outstanding  may  be  completed 

by  employees  under  the  above  terms. 


TYPE  II.— STOCK  SOLD  AT  PAR  OR,  TYPE  III.— AT  A  DISCOUNT 

In  a  greater  number  of  plans,  however,  the  stock  is  sold  to  employees  at 
par  value  or  at  a  discount.  As  sales  at  par  frequently  represent  a  discount 
from  the  market  price,  the  two  types  are  closely  allied  and  will  be  considered 
together.   Information  on  forty-five  such  plans  was  received  in  the  course  of 
this  investigation,  only  seven  of  which  were  started  prior  to  1918. 


(10) 

Some  of  the  most  extensive  stock-selling  plans  fall  into  this  group.   The 
American  Telephone  and  Telegraph  Company  sold,  beginning  in  1916,  279,281 
shares  of  stock  to  63,480  employees,  under  its  first  two  plans  at  a  little  helow 
the  market  value.   Its  third  stock  purchase  scheme,  in  May,  1921,  offered  a 
new  issue  at  par.   This  company  did  not  pay  any  sort  of  bonus.   The  Goodyear 
Tire  and  Rubber  Company  stated  in  June,  1920,  that  nearly  17,000  employees 
held  $11,900,000  of  company  stock.   It  offered  a  bonus  of  $3.00  a  share  for 
five  years  to  employees,  over  and  above  dividends  on  its  first  two  issues  of 
preferred  stock. 

The  United  States  Steel  Corporation  began  selling  stock  to  its  employees 
in  1903,  and  was  a  pioneer  in  undertakings  of  the  sort.  According  to  the 
Commercial  and  financial  Chronicle,  up  to  1921,  685,231  shares  of  preferred 
stock  were  sold  to  employees,  their  aggregate  investment  being  $91,491,842. 
Many  companies  have  followed  the  United  States  Steel  Company  also  in  paying 
bonuses  for  stock  retention,  this  corporation  giving  $5.00  a  share  annually  for 
five  years.   It  has  always  offered  its  stock  to  employees  at  a  few  points  below 
the  market  price. 

In  selling  employees  "non-voting  debenture  stock"  the  Commonwealth  Edison 
Company  of  Chicago  and  the  E.  I.  du  Pont  de  Nemours  Co.  have  made  novel  depart- 
ures. But  on  the  whole  the  features  of  this  group  of  plans,  in  terms  of  payment, 
guarantees  and  financial  aid  by  employees,  closely  resemble  the  stock-selling 
plans  at  which  shares  are  sold  at  market  value. 

Following  is  the  1920  announcement  of  the  United  States  Steel  Corporation 
together  with  that  of  the  W.  H.  McElwain  Company  in  which  stock  is  offered  at 
par  under  carefully  worked  out  conditions. 


United  States  Steel  Corporation  Plan 

TO  THE  OFFICERS  AND  EMPLOYEES  OF  THE  UNITED  STATES  STEEL  CORPORATION 
AND  OF  ITS  SUBSIDIARY  COMPANIES: 

The  corporation  again  offers  to  those  now  actually  in  the  employ  of  the 
corporation,  or  any  of  its  subsidiaries,  the  opportunity  to  subscribe  for  shares 
of  Its  common  stock,  not  exceeding  an  aggregate  total  of  60,000  shares,  under 
the  following  terms  and  conditions: 

First  -  All  subscriptions  shall  be  made  upon  the  express  condition  and 
agreement  that  all  questions  concerning  the  said  subscriptions,  and  the 
allotments  and  interests  thereunder,  shall  be  decided  by  the  Finance  Committee 
of  the  United  States  Steel  Corporation  in  its  discretion  and  such  decision  shall 
be  final  and  conclusive  upon  all  parties. 

Second  -  Subscriptions  shall  be  for  one  or  more  shares  of  common  stock  at 
the  subscription  price  $106,00  per  share. 

Third  -  The  following  table  shows  the  maximum  number  of  shares  which  may 
be  subscribed  for  by  employees  whose  salaries  or  wages  are  within  the 
respective  limits  stated,  but  employees  at  their  option  may  subscribe  for  less 
than  such  maximum  number  of  shares. 


(11) 

Subscriptions  to  Common  Stock 


Employees     rece 

Annual  Salarie 

$795.00  or  les 

795.01   to   $1 

1,766.67   to      2 

2,473.34   to      3 

3,975.01   to      4 

4,858.34   to      6 

6,890.01   to      7 

7,950.01   to      9 

9,010.01   to   12 

12,587.51   to   13 

13,912.51   to   15 

15,237.51   to   16 

16,562.51   to   17 

17,887.51   to   19 

19,212.51   to   32 


ivmg 

s  of: 

s 

766.66 

473.33 

975.00 

858.33 

890.00 

950.00 

010.00 

587.50 

912.50 

237.50 

562.50 

887.50 

212.50 

860.00 


Payment  for  Stock 


May  sulDscribe   for  a 
Maximum  Number  of: 

1  share 

2  shares 

3  shares 

4  shares 

5  shares 

6  shares 

7  shares 

8  shares 

9  shares 

10  shares 

11  shares 

12  shares 

13  shares 

14  shares 

15  shares 


Pourth  -  Payment  of  subscript  ions  shall  "be  in  monthly  installments  to  he 
deducted  from  the  salary  or  wages  of  the  subscriber.  The  first  deduction  will 
be  made  from  April  salary  or  wages.  No  installment  shall  be  less  than  $2.00 
per  share  and  shall  not  exceed  one-quarter  of  any  one  month's  salary  or  wages. 
Installments  exceeding  the  minimum  must  be  in  even  dollars.  Payment  for  the 
stock  should  be  completed  within  three  years.  Interest  at  five  per  cent  per 
annum  will  be  charged  on  deferred  payments. 

Dividends 

Fifth  -  Until  payment  of  the  subscription  has  been  completed,  any  dividends 
paid  on  the  stock  subscribed  for  will  be  credited  to  the  account  of  the  sub- 
scriber as  part  of  his  payment.  After  the  stock  is  issued  to  the  subscriber, 
future  dividends  will  go  direct  to  him. 

Cancellations  —  Refund  of  Installments 


Sixth  - 

(1) 
(2) 


(3) 


Subscriptions  will  be  cancelled  for  the  following  reasons: 
By  request  of  subscriber. 
By  (a)  voluntarily  leaving  the  service,  or  (b)  being  discharged  for 

cause,  or  (c)  failing  to  resume  employment  when  requested.  (See 

Section  Eleventh.) 
By  discontinuing  payments  without  the  consent  of  the  corporation 

for  three  consecutive  months. 


The  cancellation  of  a  subscription  forfeits  all  interest  and  benefits 
which  the  subscriber  would  have  received  if  he  had  continued  such  subscription. 
There  will  then  be  returned  to  him  the  full  amount  of  payments  made  on  the 
subscription  so  cancelled  with  interest  at  five  per  cent  per  annum,  no  credit 
being  given  him  for  dividends  or  for  the  special  allowance  referred  to  in  third 
paragraph  of  Section  Seventh,  and  no  interest  being  charged  on  deferred  pay- 
ments. A  subscription  may  not  be  cancelled  in  part. 


(12) 
Special  Benefits 

Seventh  -  When  the  stock  is  fully  paid  for,  it  will  he  issued  in  the  name 
of  the  subscriber.  He  may  sell  his  certificate,  but  as  an  inducement  for  him 
to  keep  it  while  he  remains  in  the  service,  the  following  offer  is  made,  viz.: 

If  he  will  keep  the  stock  and  in  January  of  each  year,  for  five  years,  com- 
mencing with  January,  1921,  will  exhibit  the  certificate  to  the  Treasurer  of 
his  company,  together  with  a  statement  from  a  proper  official  that  he  has  been 
continuously  in  the  employ  of  the  corporation  or  of  one  or  another  of  its 
subsidiary  companies  during  the  preceding  year,  and  has  shown  a  proper  interest 
in  its  welfare  and  progress  he  will  for  each  of  such  five  years  receive  a  cash 
payment  at  the  rate  of  $5.00  a  share  for  each  share  of  common  stock. 

Subscribers  who  may  not  have  fully  paid  their  subscriptions  by  January  in 
any  year,  will,  if  their  subscriptions  are  still  in  force,  and  they  have 
otherwise  fulfilled  all  the  conditions  of  continuous  and  faithful  service  as 
provided,  be  credited  in  their  subscription  accounts  with  the  foregoing  special 
allowance  of  $5.00  per  share  on  their  subscriptions  for  common  stock. 

Additional  Compensation 

Eighth  -  If  a  subscriber  keeps  his  certificate  and  remains  continuously  in 
the  service  for  five  years,  the  corporation  intends  that  he  shall  then  receive  a 
still  further  compensation,  which  cannot  now  be  ascertained  or  stated,  but  which 
will  be  derived  from  the  following  sources,  viz.: 

The  special  allowances  referred  to  in  Section  Seventh,  which,  after  a  sub- 
scription is  fully  paid,  are  forfeited  by: 

(a)  Transfer  of  certificate  from  neime  of  a  subscriber,  whether 

intentionally  or  otherwise; 

(b)  Voluntarily  leaving  the  service,  or  being  discharged  for  cause, 

or  failing  to  resume  employment  when  requested  (see  Section 

Eleventh) 
will  be  paid  by  the  corporation  into  a  special  fund  at  the  end  of  each  year. 
This  fund  will  be  credited  with  interest  at  five  per  cent  per  annum  and  at  the 
end  of  the  five  years*  period,  the  total  amount  thus  accumulated  will  be  divided 
into  as  many  parts  as  shall  be  equal  to  the  number  of  shares  of  common  stock 
subscribed  for  hereunder  and  then  remaining  in  the  hands  of  subscribers  who 
shall  have  continued  in  such  employ  for  the  whole  five  years.   The  corporation 
will  then  by  its  own  final  determination  in  its  discretion  award  to  each 
subscriber  whom  it  shall  find  deserving  thereof  as  many  parts  of  such 
accumulated  fund  as  he  shall  be  entitled  to  on  basis  of  the  number  of  shares 
then  held  by  him  under  this  plan. 

Death  or  Permanent  Disability 

Ninth  -  If  a  subscriber  dies  or  is  permanently  disabled  while  rendering 
faithful  service  during  such  five  years'  period,  payment  will  be  made  to  his 
estate  or  to  him,  as  follows: 


(a)   If  his  subscription  is  fully  paid  and  he  has  received  and  not  disposed 
of  his  certificate  of  stock,  the  corporation  will  pay  a  sum  equal  to  $5.00  per 
share  for  each  of  the  five  years  not  then  expired,  and  also  a  pro  rata  amount 
of  the  special  fund  arising  from  forfeitures,  referred  to  in  Section  Eighth 
preceding,  which  may  have  accrued  at  the  time  of  his  death  or  disability. 


(13) 

(b)  If  his  sulDScription  has  not  "been  paid  in  full,  the  corporation  will 
pay  the  money  theretofore  paid  in  by  him  on  account,  together  with  the  dividends 
paid  on  the  stock  subscribed  for,  the  special  allowance  for  the  entire  five 
years*  period  and  a  pro  rata  share  of  the  amount  of  the  special  fund  mentioned, 
less  interest  at  five  per  cent  per  annum  on  deferred  installments. 

(c)  If  at  time  of  decease  or  permanent  disablement,  the  subscription  has 
been  fully  paid  but  certificate  not  yet  delivered,  the  corporation  will  turn 
over  the  certificate,  as  first  stated  above,  together  with  the  additional 
payments  mentioned  in  paragraph  (a)  preceding. 

Pensioned  Employees 

A  pensioner  will  not  be  permitted  to  subscribe,  but  any  subscriber  who  is 
subsequently  pensioned  may  continue  payments  on  his  subscription  and  when  fully 
paid,  he  will  receive  the  certificate  for  the  stock  subscribed  for  and  the  pay- 
ments referred  to  in  paragraph  (a)  of  Section  Ninth,  provided,  however,  that 
as  soon  as  he  shall  have  fully  paid  his  subscription  and  received  his 
certificate  of  stock,  he  will  be  treated  as  though  permanently  disabled  and 
payments  will  be  made  to  him  in  accordance  with  provisions  of  paragraph  (a) 
Section  Ninth. 

Beneficiary 

Tenth  -  A  subscriber  may  name  in  his  subscription  as  beneficiary  the  person 
to  whom  in  the  event  of  his  death  he  desires  the  corporation  to  pay  all  ajnounts, 
in  connection  with  his  subscription,  which  would  otherwise  be  payable  to  his 
estate.   By  written  notice  delivered  to  the  Treasurer  of  the  company  by  which 
he  is  employed  he  may  substitute  another  beneficiary.   The  corporation,  upon 
satisfactory  proof  of  death,  will,  under  the  conditions  of  the  subscription 
pay  to  such  beneficiary  all  amounts  in  connection  with  the  subscription  which 
would  otherwise  be  payable  to  the  estate  of  the  subscriber.  When  the  bene- 
ficiary has  been  named  the  subscriber's  estate  shall  have  no  claim  to  any  such 
amounts,  unless  the  beneficiary  should  die  before  the  subscriber,  and  in  that 
event  payment  will  be  made  to  the  subscriber's  estate. 


Suspension  of  Employment 

Eleventh  -  Subscribers  whose  employment  has  been  suspended  by  reason  of  the 
temporary  closing  of  a  plant,  and  who  shall  continue  ready  and  willing  when 
required  to  resume  their  service,  will  not  be  deprived  of  the  special  allowance 
of  $5.00  per  share  per  year  during  such  suspension,  although  they  may  have 
accepted  employment  during  such  suspension.  As  presumptive  evidence  of 
willingness  to  resizme  employment,  the  corporation  will  accept  (1)  from  the 
holders  of  fully-paid  subscriptions,  the  exhibition  of  the  original  certificate 
in  January  of  each  year,  and  (2)  from  the  holders  of  partly-paid  subscriptions, 
the  retention  by  them  of  their  subscription  during  the  preceding  year. 

The  above  period  of  suspension  will  not  be  counted  as  part  of  the  three 
years  limited  for  the  full  payment  of  the  subscriptions,  and  during  such  sus- 
pension monthly  payments  will  not  be  required,  though  if  so  desired  by  the 
employee  they  may  be  continued. 

In  case  of  the  death  during  such  suspension  of  any  such  subscribing  and 
continuing  employee,  his  estate  or  his  beneficiary  will  be  entitled  to  the 
seone  benefits  accruing  to  his  subscription  as  if  he  had  died  while  under 
employment. 


(14) 

Failure  to  present  the  original  certificate  as  provided,  or  the  withdrawal 
of  a  partly-paid  subscription,  or  the  failure  to  resume  employment  when 
requested,  will  constitute  a  relinquishment  of  all  benefits  referred  to  in  this 
circular. 

If  a  plant  or  office  is  permanently  abandoned  and  a  subscriber  at  such  plant 
or  office  does  not  continue  in  the  service  at  another  plant  or  office  of  the 
corporation  or  a  subsidiary  company,  settlement  of  his  subscription  accounts 
will  be  made  as  provided  in  case  of  pensioned  employees.  Section  Ninth. 

Twelfth  -  Subscriptions  will  be  received  until  February  29,  1920.  and  allot- 
ment made  as  soon  thereafter  as  possible. 

By  order  of  the  Finance  Committee, 
UNITED  STATES  STEEL  CORPORATION, 

Richard  Trimble,  Secretary. 


W.  H.  McElwain  Company  Plan* 


Announcement  to  Employees 


William  H.  McElwain  founded  this  business  in  1894  and  associated  with  him 
as  partners  a  small  group  of  men  who  had  faith  in  his  policies.   The  partnership 
was  succeeded  by  a  corporation,  as  the  size,  extent  and  complexity  of  the 
business  made  this  form  of  organization  necessary.   It  is  impossible  to  go 
back  to  the  earlier  days  of  actual  partnership.   It  is  possible,  however,  to 
develop  in  the  greater  institution  of  today  the  factors  that  make  the  relation 
of  partners  the  closest  relation  in  business  life.   These  factors  we  need  in 
every  department  of  the  business. 

With  this  need  in  mind  we  are  giving  every  employee  who  has  for  six  months 
been  a  member  of  the  McElwain  team  an  opportunity  to  purchase  the  Second 
Preferred  Stock  of  the  company  -  to  become  a  joint  owner  in  the  McElwain 
enterprise.   He  may  own  an  interest  in  the  McElwain  factories,  the  McElwain 
distributing  houses,  the  McElwain  organization,  and  the  McElwain  goodwill. 
He  may  receive  dividends  from  his  financial  investment  in  the  business  in 
which  he  participates.   We  believe  that  the  employees  of  the  company  will 
welcome  this  opportunity,  and  that  the  response  will  be  general. 

What  is  the  stock? 

Second  Preferred  Stock  of  W.  H.  McElwain  Company.   Par,  $50  per  share 
Regular  dividends  6^   ($3.00  per  share)  annually.   Extra  dividend  limited  to  3$f 
($1.50  per  share)  annually.   In  normal  times,  therefore,  the  stock  pays  divi- 
dends aggregating  9^   ($4.50  per  share)  each  year. 

Price  $50  per  share,  plus  accrued  and  unpaid  dividends. 

The  company  has  a  large  capital,  is  conservatively  financed,  and  has  never 
failed  in  twenty-five  years  to  earn  a  fair  profit.   Its  First  Preferred  Stock 
pays  only  7^   and  is  owned  by  investors.   The  stock  now  offered  (Second  Preferred 
Stock)  has  in  the  past  been  owned  principally  by  managers,  superintendents, 
foremen,  salesmen  and  other  executives.   They  continue  to  own  their  stock. 
The  management  will  set  aside  a  block  of  new  stock,  exactly  similar  in  every 
respect,  for  sale  to  employees  of  the  company.  An  employee  may  subscribe  for 
himself  or  his  immediate  family.   No  other  subscriptions  will  be  accepted. 
The  right  is  reserved  to  withdraw  this  offer  at  any  time. 

First  Preferred  and  Second  Preferred  Stock  have  no  voting  rights  except 
on  certain  contingencies  like  a  failure  to  pay  dividends  on  First  Preferred 
Stock,  when  both  classes  become  entitled  to  vote. 


*The  company  has  been  merged  with  the  International  Shoe  Co.  and  plan  withdrawn. 


(15) 

The  company  cannot,  of  course,  agree  to  iDuy  back  its  own  stock  from 
employees  who  purchase  it.   The  company  will,  however,  endeavor  to  assist  any 
employee,  who  finds  it  necessary  to  sell,  in  finding  a  customer  among  other 
employees. 

If  you  desire  to  join  the  group  of  men  and  women,  over  four  thousand  in 
number,  who  own  the  McElwain  business,  please  fill  out  and  sign  the  attached 
application  and  hand  it  to  the  person  in  your  plant  who  is  designated  to  receive 
applications,  with  the  amount  of  money  required.  You  will  receive  a  receipt 
which  must  be  surrendered  when  the  certificate  of  stock  has  been  prepared 
and  is  ready  for  delivery. 

Any  employees  who  wish  to  purchase  stock,  but  are  unable  to  pay  for  it  in 

full  at  once,  should  talk  with  their  foremen  on  the  subject. 

J.   PRANKLIN  McELWAIN, 

Por  the  Board  of  Directors. 
June  21,  1920. 

NOTE  -  Regular  dividends  are  payable  as  follows:  1  1/2$^  ($0.75  per  share) 
on  the  first  days  of  February,  May,  August  and  November. 

Extra  dividend  is  paid  in  June  of  each  year.   It  consists  of  one-fourth 
of  the  net  earnings  of  the  fiscal  year  ended  May  31,  remaining  after  the 
payment  of  1^   on  Pirst  Preferred  Stock  and  65^  on  other  classes  of  stock.   Such 
extra  dividend  must  not  exceed  35^  in  any  year. 

Including  regular  and  extra  dividends,  9^^  has  been  paid  on  Second  Preferred 
Stock  in  every  year  since  the  organization  of  the  company,  except  1915, 
when  7  1/2^^  was  paid. 


TYPE  IV.— STOCK  GIVEN  TO  EMPLOYEES 

A  much  greater  diversity  of  features  is  found  when  plans  which  make  a 
gift  of  stocks  to  employees  are  analyzed.  Per  this  study  special  information 
was  obtained  regarding  sixteen  such  plans. 

Gifts  of  stock  are  generally  made  as  part  of  a  bonus  or  profit-sharing 
system  or  in  close  relation  thereto.   The  schemes  vary  from  very  simple  out- 
right donations  to  complex  systems  of  industrial  partnership.   Henry  A.  Dix 
&  Company,  manufacturers  of  house  dresses  in  New  York,  set  aside  $100,000 
of  common  stock  in  April,  1920,  to  be  distributed  as  an  annual  bonus  to 
selected  managers,  department  heads  and  foremen.   Ten  per  cent  dividends  were 
guaranteed,  and  the  bonus  was  paid  one-fifth  in  cash  and  four-fifths  in  stock. 
Another  simple  plan  is  that  of  the  E.  I.  du  Pont  de  Nemours  Company,  which 
makes  awards  in  stock  for  "continuous  service,  in  inventions,  unusual  ability, 
industry  or  loyalty."  Class  A  awards  are  for  especially  distinguished  service 
of  this  nature,  Class  B  for  less  achievements  among  employees  who  have 
worked  for  the  company  two  years  or  more. 

The  Pittsburgh,  Butler  and  Harmony  Consolidated  Railway  and  Power  Company 
is  reported  to  have  created  a  trust  fund  of  $1,000,000  in  its  common  stock, 
the  dividends  from  which  were  to  be  divided  equally  among  its  four  hundred 
employees.   The  voting  power  of  the  stock  was  to  remain  with  the  president  of 
the  company,  but  the  employees  were  to  be  permitted  to  elect  three  directors 
to  the  board.   It  was  believed  that  in  order  to  make  each  man's  dividend  as 
large  as  possible  an  incentive  would  be  created  to  keep  down  the  number  of 
employees. 


(16) 

As  an  illustration  of  a  complex  scheme  for  gifts  of  stock,  the  project  of 
the  Larkin  Soap  Company  of  Buffalo,  N,  Y. ,  may  "be  instanced.   In  July,  1919, 
this  firm  announced  that  its  directors  would  select  employees  who  had  "a 
sustained  interest  in  the  business"  and  had  "demonstrated  their  value"  and 
divide  them  into  groups.   On  receiving  a  favorable  vote  from  ninety  per  cent  of 
their  group,  they  would  "become  eligible  to  share  in  the  distribution  of 
$10,000,000  of  common  stock.   Each  could  hold  stock  to  the  amount  of  a  tenth 
of  his  annual  salary  times  three  years  less  than  his  years  of  service  with 
the  company.   After  a  seven  per  cent  dividend  on  the  preferred  stock  was  paid 
and  provision  was  made  for  expansion  of  the  company,  buying  in  of  common  stock 
and  the  regular  dividend  on  it,  any  remaining  profits  were  to  be  divided 
equally  between  the  original  owners  of  the  business  and  the  employee- 
stockholders.   On  leaving  the  company,  except  to  retire,  an  employee  must,  at 
the  option  of  the  firm,  sell  it  his  stock  for  cash,  take  its  six  per  cent  six 
months  note  for  it  or  exchange  it  for  second  preferred  stock. 

The  Dennison  Manufacturing  Company  has  a  somewhat  similar  plan  in  its 
"industrial  partnership"  stock.   The  following  explanation  by  the  company  of 
its  system  is  quoted  because  of  its  clear  explanation  of  the  underlying 
philosophy  of  the  plan,  and  because  it  represents  a  ten  years*  experiment  and 
development. 


Dennison  Industrial  Partnership  Plan 

"The  chief  motives  which  led  us  to  re-incorporate  the  Dennison  Manufacturing 
Company  in  1911  in  the  form  of  an  Industrial  Partnership  were,  first,  to 
provide  a  better  means  of  distribution  of  whatever  profits  there  might  be  in 
excess  of  a  fair  return  on  capital;  second,  to  make  certain  that  the  voting 
power  would  always  remain  in  the  hands  of  those  intimately  acquainted  with  the 
company's  affairs.  Prom  the  early  days  of  the  company,  stock  had  been  offered 
to  employees  at  a  figure  below  its. actual  value,  but  this  plan  proved 
insufficient,  unsatisfactory  and  unfair  in  many  ways. 

"At  the  time  of  the  change  our  company  had  only  one  kind  of  stock,  which  was 
each  year  tending  more  and  more  to  pass  out  of  the  hands  of  those  connected 
with  the  business.  A  part  of  the  profits  had  each  year  been  withheld  from 
dividends  in  order  to  provide  for  the  growth  of  the  company,  and,  therefore 
from  time  to  time  there  had  been  a  distribution  of  the  surplus  in  the  form  of 
stock  dividends.   The  company  had  passed  the  stage  where  the  capital  invested 
in  it  was  at  greater  risk  than  the  normal  business  risk,  and  its  financing 
therefore,  required  no  more  than  a  normal  return  to  capital.  Whatever  more 
than  this  was  earned  by  the  organization,  neither  the  needs  of  the  concern  nor 
the  demands  of  justice  required  to  be  distributed  to  the  stockholders  as  such. 
On  the  other  hand,  two  considerations  pointed  to  increasing  danger  in  the 
future.  Pirst,  the  constant  spectacle  of  all  fruits  of  extraordinary  efforts 
on  the  part  of  the  managers,  foremen,  or  salesmen,  being  turned  over  to  people 
who  were  almost  strangers  to  the  company,  could  only  result  in  a  progressive 
weakening  of  enthusiasm  and  loyalty.   Second,  the  steady  increase  in  the  propor- 
tion of  stock  held  by  people  unacquainted  with  the  business,  pointed  to  the  time 
when  the  voting  power  must  inevitably  be  used  for  some  other  purposes  besides 
the  permanent  good  of  the  company  itself.  As  a  measure  of  safety  for  the 
future,  then,  the  form  of  incorporation  was  changed. 


(17) 


"The  common  stock  was  all  converted  into  a  first  preferred  stock,  carrying 
a  fixed  cumulative  dividend,  with  preference  in  assets  and  dividends,  but  no 
rights  to  accretions.   The  amount  of  this  stock  and  the  rate  of  dividend  were 
chosen  to  represent  a  fair  return  on  the  capital  at  that  time  invested  in  the 
concern.   It  was  then  provided  that  if  there  were  any  profits  remaining  after 
these  dividends  had  been  fully  paid,  these  profits  should  be  invested  in  the 
business  and  against  them  issued  yearly  a  stock  which  we  call  Industrial 
Partnership  stock. 

"Because  this  Industrial  Partnership  stock  had  been  earned  by  the  efforts 
of  the  organization,  not  by  the  mere  investment  of  capital,  it  became  necessary 
to  determine  to  whom  this  stock  should  be  issued.   In  other  words,  who  were  the 
real  profit  earners  in  the  organization?  An  analysis  so  thorough  as  to  deal 
almost  individually  with  cases  of  more  than  two  thousand  employees  led  us  to 
the  conclusion  that  profits  depended  almost  solely  on  such  men  as  sales 
managers,  senior  salesmen,  department  heads,  foremen  and  the  like. 

"The  further  task  then  remained  of  providing  means  of  specifically  designat- 
ing each  year  who  these  individuals  were.   Originally  we  used  as  a  criterion  the 
amount  of  pay  received  by  each  and  their  length  of  service.  Eventually  the 
tremendous  changes  in  the  value  of  the  dollar,  and  more  especially  the  irregular 
application  of  these  changes  among  various  classes  of  employees,  entirely 
destroyed  the  salary  line  as  a  true  dividing  line  between  those  of  our  employees 
whose  effects  upon  profits  were  important  and  appreciable  and  those  whose 
effects  upon  our  net  profits  account  were  remote  and  heavily  conditioned  by  the 
policies  of  the  management.  Principal  employees  are  now  limited  to  those  who 
have  had  five  years  or  more  of  service  and  whose  position  with  the  company 
requires  the  exercise  of  managing  ability  and  control  over  methods  of  manu- 
facturing or  marketing,  such  as  an  executive,  department  head,  principal  foreman, 
chief  clerk,  branch  manager,  or  principal  salesman;  or  whose  work  shows  the  use 
of  a  high  degree  of  imagination,  tact  or  business  judgment  --  those  qualities 
upon  which  we  believe  the  constant  earning  of  profits  to  depend.   To  the 
directors  is  left  the  application  of  this  rule  but  the  industrial  partnership 
stockholders  may  from  year  to  year  pass  votes  further  defining  the  directors* 
methods  of  choosing.   These  men  are  classed  as  principal  employees  and  to 
them  the  industrial  partnership  stock  is  issued,  if  their  combined  efforts  have 
earned  profits  in  the  previous  year.   To  distinguish  the  relative  profit  earning 
power  of  each  one  of  the  men  in  this  class,  it  was  clear  that  the  relative 
salary  was  a  fair  guide,  and  the  stock  is  therefore  issued  to  them  in  propor- 
tion to  the  salary  they  received  the  previous  year. 

"In  its  main  outlines  this  describes  the  distribution  of  our  profits  for  the 
future  --  a  fixed,  sufficient,  and  cumulative  dividend  for  capital,  and  all 
profits  in  excess  of  that  amount  each  year  to  the  men  who  earn  those  profits. 
Several  qualifying  provisions  safeguarding  this  or  that  point  can  be  found  in 
the  agreement  of  association  and  by-laws. 

"Since  its  establishment  the  results  of  the  Industrial  Partnership  plan  have 
been  as  follows:  Number  or 

Shares  Principal 

Distributed  Employees 

March,  1913  15,122  167 

March,  1914  18,604  211 

March,  1915  12,779  218 

March,  1916  12,884  228 

March,  1917  43,752  260 

March,  1918  19,015  288 

March,  1919  30,740  320 

March,  1920  57,363  364 


10^. 


Average  cash  dividend  rate  on  outstanding  Industrial  Partnership  stock 

DENNISON  MANUFACTURING   COMPANY 


\ 


(18) 

I 

Gifts  of  Stock 

Gifts  of  stock  are  frequently  limited  to  the  more  responsible  employees, 
or  to  those  whom  the  officials  deem  especially  worthy  of  recognition.   The 
Boston  Consolidated  Gas  Company,  which  has  distributed  a  "bonus  in  the  form  of 
preferred  stock  for  about  fifteen  years,  limits  its  gifts  to  selected  employees 
who  "show  regularity,  intelligence  and  energy"  and  have  worked  for  the  company 
at  least  six  months,  during  the  past  year.   In  the  year  ending  June  30,  1920, 
839  out  of  1,357  employees  were  reported  to  have  qualified. 

The  president  of  the  Harvard  Knitting  Mills,  which  has  for  two  years  given 
a  share  of  profits  as  "certificates  of  ownership,"  has  recently  complained  that 
only  about  forty  per  cent  of  the  beneficiaries  have  manifested  the  increased 
energy  and  zeal  which  was  expected.   It  is  worthy  of  note  that  the  mill  shares 
profits  in  this  way  with  all  who  have  a  service  record  of  a  year  or  more.   In 
this  connection  a  comment  of  the  Studebaker  Corporation  on  its  various  incentive 
plans  may  be  emphasized.   In  reply  to  a  question  as  to  "pitfalls  to  be 
avoided,"  a  representative  of  the  company  answers:  "The  plan  must  be  strictly 
adhered  to  in  order  that  men  may  not  expect  to  receive  these  benefits  as  a 
matter  of  course.   In  other  words  -  the  man  must  realize  that  there  is  an 
obligation  upon  him  which  he  must  discharge  in  order  to  merit  the  benefits  set 
forth." 

SUMMARY 

The  effectiveness  of  the  plans,  discussed  in  this  survey,  depends  very 
largely  on  the  way  in  which  they  are  presented  to  the  employees.   It  also 
depends  on  the  number  of  shares  the  employees  as  individuals  hold.   Those  plans 
which  place  only  two  or  three  shares  in  the  possession  of  an  employee  hardly 
can  be  expected  to  create  much  enthusiasm. 

The  experience  of  companies  with  such  schemes  is  that  the  appeal  is  strong 
and  the  results  valuable  with  the  salaried  officers  and  those  who  can  under- 
stand the  full  significance  of  the  ownership  of  stock.   With  the  rank  and  file, 
however,  it  has  proved  difficult  to  make  the  men  realize  that  the  sheet  of 
paper  really  means  ownership  and  a  voice  in  the  management  of  the  company. 

It  is  interesting  to  note  that  in  England  in  1919  there  were  forty-three  new 
"co-partnership  plans"  as  they  are  called  in  that  country,  in  1920,  forty  and 
in  1921  only  three,  while  five  of  the  1919  plans  and  one  of  the  1920  creations 
were  discontinued.   There  seems  to  be  a  slowing  up  in  the  extension  of  this 
kind  of  employee  participation  in  that  country  which  is  explained  by  some  as 
being  the  result  of  unsuccessful  experiences  on  the  part  of  those  who  have 
experimented  with  the  schemes.   Possibly,  however,  the  slowing  up  of  this 
movement  in  England  may  be  due  to  business  conditions  and  should  not  be  taken 
as  indication  of  a  change  in  attitude  until  it  has  proceeded  further. 


PreWous  refwences  to  subject,  page*  119, 155, 158. 170,  195.  230.  325.  241,  258.  271.  311.  324,  330. 337. 347, 369.  374.  383.  414,  415. 423, 439, 
453.  454.  481, 492.  499.  500.  505.  508.  541. 553. 587.  603. 714,  742, 848.  884.  955.         iMUtrUl  Rclstltai,  BlOOSfieid  ■  Ubtr  Mf  Cfl 


TYPE  L     SOLD  AT  MARKET  VALUE 


CONCERN 
Date  Pl&n  £stablished 


American  Maltiinraph  Company 

May  1,  1920 


American  Snicar  Refluinx  Ca. 
Dec.  10,  1918 
Dec.  20,  1919 


BLIGIBILITT 

(Requiremeuts) 


None 


None 


i, 


Joseph  Knopf  A  Sonn,  Ine. 

(Rochester,   N.   Y.) 
1919 
90%     subscribers 


Gulf  Coast  liines 

(New  Orleans,  Texas  ft  New 
Mexico    Railway    Coiupan^') 
Feb.   1,   1921 


Hilo   Tarnish   Corporation 

(Brooklyn,  NY.) 
May,  1920 


3   months'   ii*>rvice 


STOCK     OFFERED 


Common 
12,500   shares 
($250,000) 


Common 
Preferred 


None 


5  years'   service 


Hydraulic    Steel    Co. 
May,   1920 
45%    subscribers 


Lehifh  TaDey  R.  R.  Co. 

June    22,    1920 


New  York  Central  R.  R.  Co. 

Sept.  15,  1921 
75,000  employees 


Pittsburgh  Coal  Co. 

1901 

15,0<X)  empl(»yeeq 

12.77%  subscribers 


Studebaker  Corporation 

Sept.  1,   1919 
14,000  employees 


Common 
M,000  shares 


$150,000 


Amorlcaa  citizen- 
ship, 3  months'  ser- 
vloe 


None 


None 


None 


Common 

[8i.998  shares  sub- 
scribed—35%  of  out- 
standing  common] 


Common 


Common 
Preferred 

[19,7a3  shares  sub- 
scribed] 


3   months'   service 


Common 
Preferred 


TERMS    OF    PAYMENT 


I 


2  per  share  down 
1  monthly 


$3,  or  multiple,  down, 
equal  payments  thereafter. 
Two  years  to  pay  for  5 
shares  or  less,  3  years  for 
more  than  5 


30  monthly  payments 


TERMS     OF     REDEMPTION 


Stock  non-assignable  and 
non-transferable 


On  demand,  payments  re- 
turned with  4%  interest 


"Reasonable     amount     to 
each,"  paid  by — 
(a)— Cash 
(b)— Dividends 
(c) — Salary   deductions 
(d) — Profit-sharing   bonus 


12%  of  monthly  wages 
down,  6%  monthly  there- 
after, 50%  of  any  profit- 
sharing.  Yearly  salary  Is 
maximum  subscription 


Monthly  deduction  from 
salary  of  $5,  or  multiple 
thereof,  per  share 


Monthly  payments  of  $1 
or  multiple.  At  least  l-24th 
of  montli's  wages.  Maximum 
15  shares 


Unlimited  amount.  Min- 
imum $1  per  share  monthly 
— maximum  25%  of  pay.  5 
years  to  pay  up 


On  leaving  company  re- 
ceives stock  paid  for  and 
remainder  in  cash  less  in- 
terest 


"No  guarantee"  of  future 
price  or  dividends 


On  demand,  payments  re- 
turned with  5%  interest. 
Cannot  assign  contract 


Maximum  5  shares,  not  to 
exceed  $300  or  20%  of  an- 
nual salary.  10%  down, 
40%  in  equal  quarterly  pay- 
ments during  4  years 


Under  6  months,  pay- 
ments returned ;  over  6,  may 
buy  stock  or  sell  at  market 
value  and  receive  any  bal- 
ance 


CONTRIBUTION 
OF  FIRM 


7%  allowed  on 
all  partial  pay- 
ments —  may  be 
credited  on  shares 


6%    dividends, 
guaranteed  for  30 
months 


"No   charge  for 
services  of  firm" 


$1  per  share 
yearly  to  stock 
held  by  employees 


50%  if  employee 
continues  p  a  y  - 
ments  for  4  years 


REMARKS 


Payments  returned  if 
employee  leaves  before 
stock  is  paid  up.  Par 
is  20 


Accrued  dividends 
paid  when  stock  is  pait! 
up— minus  4%    interest 


6%  charged  on  de- 
ferred payments.  Divi- 
dends charged  against 
them 


6%   interest  on  unpaid 
balances.     Par   is   40 


May  buy  1,  2,  3,  4,  5. 
10  or  20  shares.  Receive 
7%  dividend  on  amount 
paid.    Par  is  50 


6%  charged  on  unpaid 
balances.  Dividends 
credited.  Balances 
turned  over  when  stock 
is  paid  up.     Par  is  100 


Purchased  through 
contract  with  employees' 
association 


6%  interest  on  unpaid 
balances.  Dividends 
credited 


Copyright  1922,  Meyer  Bloomfleld  and  Daniel  Bloomfleld — ^All  rlirl&ts  strictly  reserved 


TYPE  I.     SOLD  AT  MARKET  VALUE— Continued 


CONCERN 
I>ai«   Plan  Established 

ET.IGIBLLITT 

(Beqnlrements) 

STOCK    OFFEKED 

TERMS     OF    BEDEMPTION 

TERMS    OF    PAYMENT 

CONTRIBUTION 
OF  FIRM 

REMARKS 

Tnimbiill   Steri  Co. 

Oct,  1920 
5,000  employees,  1,500  subscribers 

Common 

[40,000  shares,  $1,- 
000,000    subscribed] 

Bonus  of  $7  per 
share  to  em- 
p  1  o  y  e  e  «  hold- 
ing stock  until 
Jan.  1,  1925 

Par  is  25.    Sold  at  27.50 

Wheeling   Steel   Corporation 

Aug.,  1920 

Common 

[1-40    of   outstand- 
ing    common      sub- 
scribed    —    10,300 
shares— $824,000] 

Minimum     $3     per     share 
monthly.    Maximum  25%  of 
monthly   salary.     Payments 
deducted  from  salary 

Bonus  of  $4  a 
year  to  those  re- 
maining with  firm 

6%    charge   on   unpaid 
balances.  Dividends  cred- 
ited 

Hercules  Powder  Co. 

(WUmington,  DeL) 
1920 
1,700  employees 

None 

Preferred 

2   to   5   shares,   according 
to     salary.      Minimum     $3 
montlily   per   share.     Maxi- 
mum 25%   of  salary 

Payments     returned    less 
5%  interest  on  unpaid  bal- 
ances 

Bonus  of  $4  a 
year  if  held  for  5 
years 

5%  interest  on  unpaid 
balances 

Hibernia  Bank  and  Truitt  Co. 

(New  Orleans) 
224  employees         45  subscribers 

Maximum    5    shares,    $10 
down,  $5  per  share  monthly 

5%  interest  on  unpaid 
balances 

Standard  Parts  Company 

(Cleveland) 
1918 
2,322  employees    60%  subscribers 

[Judgment  of 

management] 

Common 

10%    down,   $3   per   share 
monthly 

Befund  on  leaving  firm 

Fnner  ft   Smith 

(Cleveland) 
1916 
80  employees      20  subscribers 

[Judgment  of 

directors] 

10%   down,  personal  note, 
with  interest  at  6% 

Must  give  firm  option   of 
rebuying  at  sale  price  plus 

Dividends  credited 
against    unpaid    balance 

Thos.  Devlin   Mfir.   Co. 

(Burlington,  N.  Y.) 

[Selected 

employeesj 

$1000    to    each    employee. 
Paid    for    at    $2    per   week. 
Certificate    issued    for    each 
$100  paid 

In  event  of  death,  unpaid 
balance  plus  6%  returned 

Guarantee 
against  loss  while 
stock      is      being 
paid  for 

Dividends     on     whole 
$1000  received  while  pay- 
ments are  being  made 

Illinois   Central  B.  B.   Co. 

None 

Monthly   deductions  from 
salaries 

Los  Ansreles  Gas  &  Electric 
Corporation 

Feb.    1,    1921 
1,500  employees    50%   subscribers 

None 

^  %    cumulative 
preferred 

Maximum  5  times  month- 
ly salary.    4%  years  to  pay 

Interest    credits    aver- 
age 9.3%  while  payments 
being  made 

Proctor  ft  Gamble  Co. 
(Cincinnati) 

Jan.  26,  1920 

Jan.  26,  1920 
Jan.  26,   1920 

Any  employee  (ex- 
cept    salesmen     and 
traveling    representa- 
tives)     with      maxi- 
mum   salary    $2,000 

Employees       who 
have  subscribed   and 
paid  up  as  above 

Employees  not  eli- 
gible    under     profit- 
sharing   plan 

Common 

$100     savings     cer- 
tificates,      exchange- 
able     for       common 
stock 

Common 

Maximum,  annual  salary. 
Payments  minimum  1-12  of 
5%   monthly  and  all  profit- 
sharing  dividends 

Maximum  5  certificates  a 
year.     Minimum   payments, 
5%    of  salary  monthly 

Maximum  1  year's  salary, 
not  to  exceed  $3000 

$5  down,  payments  at  any 
time  within  6  years 

Holding  less  than  1  year 
— payments    returned    plus 
6%  ;  over  1  year — stock   (or 
may    offer    to    company    at 
market  price) 

On  leaving  or  on  demand, 
payments  returned  with  6% 
interest 

If  stock  falls  below  cost 
within  6  years,  firm  returns 
cash    plus    6%    interest,    if 
employee  remains  in  service 
(maximum  $3,000) 

Profit  -  sharing 
dividends  of  10% 
first  year  to  20% 
after  10  years 

Stock  delivered  as  fast 
as  paid  up  after  1  year's 
participation 

6%  interest  paid.    Cer- 
tificates non-transferable 

Dividends  credited.  In- 
terest on  unpaid  balances 
4%    if  15%    of   stock   Is 
paid   in   each    year,   6% 
if  less 

Southern  California  Edison  Oo. 

1917 

90%  subscribers 

7%%  of  salary  deducted 

8%   dividends.     6%   in- 
terest   on    unpaid    bal- 
ances 

Copyright  1922,  Meyer  Bloomfleld  and  Daniel  Bloomfleld — ^All  rights  strlcfly  resenred 


TYPE  II.     SOLD  AT  PAR 


CONCEBN 
Date  Plan  Established 

ELIGIBILITY 

(Bequirements) 

STOCK    OFFEBED 

TEBMS   OF  PAYMENT 

TEBMS     OF     BEDEMPTION 

CONTBIBUTION 
OF  FIBM 

BEMABKS 

Canada  Cement  Co.,  Ltd. 

(Montreal) 

None 

Common 
Preferred   7% 
[1  share  preferred  to 
3  shares  common] 
Amounts  in  discre- 
tion of  Board  of  Di- 
rectors 

Minimum,     $1      per      share 
monthly 

* 

5%   interest  on  unpaid 
balances.Dividends  cred- 
ited.     Stock    held    until 
paid    up,   5   years'   serv- 
ice and  2  years  after  al- 
lotment.    Par  is  100 

Commonwealth  Edison   Co. 

(Chicago) 

July  1,  1909 
5,0(X)  employees 
2,360  subscribers 

1  year's  service 

Non-voting  debenture 

3    or   5%    of    salary,    paid 
within  4  days  of  pay  day 

Payments,    less    expenses, 
returned   if  not   paid   regu- 
larly 

Amount  deposited  with 
compound  interest  at  5% 
used  to  buy  stock  after 
5  years 

Cleveland    Twist    DriU    Co. 
Dec.   14,   1918 

5   years'    service 

"Note    and    certifi- 
cate of  participation" 

Sold    in    $10    or    multiple 
thereof 

May  require  6  months'  no- 
tice 

6%  interest  paid  semi- 
annually on  payments 

r 

Craddock-Terry    Co. 

(Lynchburg,   Va.). 

Second  Preferred 

Weekly     or     monthly     pay- 
ments for   not   more   than  1 
year 

If    sold     before    specified 
date,  must  offer  to  firm  at 
par  plus  6%   from   date   of 
last  dividend 

No  interest  on  nnpaid 
balances.     Dividends   re- 
ceived    while     stock     is 
being  paid  for 

Eastman   Kodak   Co. 

(Rochester,  N.  Y.) 
July  10,   1010 

2    years'    continuous 
service 

Common 

lO.OOD  shares 

($1,000,000),    donnt- 
ed    by    Mr.    Eastman 
and  same  amount  of- 
fered   by   company 

Maximum    2%    of    salary. 
May  pay  from  dividends  or 
as  convenient 

For    acts    prejudicial    to 
firm,  certificate  may  be  an- 
nulled   and    payments    re- 
turned minus  interest 

Purchases    subject    to 
approval    of     Mr.    East- 
man, or  firm,  according 
to  the  stock 

Edmonds    Shoe  Co. 

(Milwaukee) 
Dec.,  1010 

7%  preferred 

Weekly  payments  allowed 

3%       additional 
interefit 

- 

Elflrin   National   Watch   Co. 

(Elgin,  111.) 
Jan.,  1921 

(a)— Under    5    years' 

service — 4  shares 
(b)— 5  to   15  years — 

6  shares 
(c) — 15  to  25  years — 

8  shares 
(d) — Over  25  years— 

10  shares 

Amount    of    bonus    mini- 
mum  payment   in   January. 
Monthly  payments  of  $10 

Leaving     firm,     employee 
must   offer  it   stock   at   par 
plus  increase  in  book  value 

No    interest 
charged     on     un- 
paid  balances 

Dividends  credited 
Par  is  25 

Goodyear  Tire  and  Bobber  Co. 

(Akron,  0.) 
Nov..  101!) 
15,000  subscribers 

April  1,  1920 

June  2,  1920 
1,496    subscribers 
[1921— $12,000,000     stock     owned 
by   employees] 

None 
None 

Preferred 
(Over  $5,000,000 

subscribed) 

Preferred  7% 
($5,000,000) 

3  share  blocks 
Preferred — 2 
Common — 1 

($582,700    sold) 

Maximum    20    shares.     $1 
weekly   or   $4   monthly   per 
share 

Same  as  alcove 

25%    down,    balance    June 
25,  1920 

Payments  returned  on  re- 
quest with  4%  interest 

Same  as  above 

3%    bonds  for  5 
years   to   employ- 
ees holding  stock 
and   in   service 

Same    as    above 

5%   interest  on  unpaid 
balances.     Par  is  100 

Same  as  above 

None 

W.  H.  McElwain  Co. 

(Manchester,    N.    H.) 
June  21,  1920 
[Discontinued  upon  merger  with 
International   Shoe  Co.] 

6  months'  service 

Second    Preferred 
[No   vote  ordinarily] 

Full    payment    with    sub- 
scription 

Firm  will  try  to  find  an- 
other employee  to  buy 

Stock  sold  at  par  (50) 
plus  accrued  and  unpaid 
dividends.     Regular  div- 
idend   6%.      Extra    divi- 
dend 3% 

Copyright  1922,  Meyer  Bloomfleld  and  Daniel  Bloomfield — ^AU  rights  strictly  reserred 


TYPE  n. 

SOLD  AT  PAR— 

Continued 

CONCBBN 
Bate  Plan  E«tablUtied 

BI.IGIBII/ITT 

( Bequlrements  ) 

STOCK 
OFFBRED 

TERMS   OF  PAYMENT 

TERMS     OF    REDEMPTION 

CONTRIBUTION 
OF  FIRM 

REMARKS 

Liggett  tt  Meyers  Tobacco  C«. 

March,  1920 

Common  and  Com- 
mon B 
[21,496  shares  offered] 

T.lbby.  McNeill  ft  liibby 

(Chicago) 

June,  1920 

6  months'  service 

640,000  shares  (140- 
000  on  deferred  pay- 
ments) 

10  to  50  shares.    2  years  to 
pay 

Par  is  10 

Midvale  Steel  *  Ordnance  Ce. 

Nob* 

Monthly   payments,   mini- 
mum  $4,   maximum  25%    of 
salary.     Number   of  shares 
fixed     by     monthly     wage. 
Maximum   20 

Par  is  50 

New  Enirland  Power  Co. 

(Worcester,  Mass.) 
Jan.  30,  1920 

None 

Preferred 

Monthly  payments  $2  per 
share.     Maximum,   one-fifth 
of  monthly  salary 

Payments    returned    plus 
6%   interest 

Annual      bonus 
for  holding  stock 
— $1  first  year  to 
$4  the  seventh 

6%  interest  on  amount 
paid    in    until    stock    is 
paid    up;    then    regular 
dividends 

Rochester  Folding  Box  Co. 

(Rochester,  N.  Y.) 

76%  subscribers 

None 

"Employees'    Pref- 
erence Stock" 

[1000  shares  offered 
and  subscribed] 

10%    down,   $2  per   share 
weekly 

Death — Firm  will  buy  for 
$110 

Retirement— Will  buy  for 
$130 

Others  leaving  firm  must 
sell  at  $101 

8%     dividends     before 
any    are    paid   on   other 
stock,  and  share  profits 
after    all    dividends    are 
paid.     8%    on    all    cash 
paid  in 

Strathmore  Paper  Co. 

(Mittineague,  Mass.) 
July  1,  1920 

6  months'  service 

"Employees' — pre- 
ferred 7%  cumulative 
[$500,000        offered, 
$10  a  share] 

Maximum  $2,500.     Weekly 
payments     allowed,      mini- 
mum  $1 

Must  be  offered  to  firm  on 
death   or   leaving,   30  days' 
option  at  $10.30 

Service  dividend — 
1   to   5    years — 
1%   yearly 
5  to  10—2% 
10  to  15—3% 
15  to  20—4% 
Over  20  or  retired 
—5% 

Special  stock,  no  vot- 
ing rights 

Niagara  Falls  Power  Co. 

Jan.  30,  1920 
600  employees 
92%   subscribers 

6   months'   service 

Common 

25  cents  per  share  weekly 

Payments    returned    plus 
4%  interest  quarterly 

6%  annually, 
plus  amount  equal 
to  dividends,  over 
4%  on  same  shares 
of  common   stock 

[Extra  compen- 
sation ends  when 
stock  is  issued) 

Par  is  100 

Swift  *  Co. 

[Employees'  Stock  Investment 
Plan] 

10,000  subscribers    ; 

[Employees'     Stock     Savings 
Plan] 

June  2,  1919 
13,000  subscribers 

None 
None 

Treasury  Stock 

1  to  50  shares 

[As  many  as  can  be  paid 
for  in  2  years] 

10%  down,  6  months'  note 
at  5%   Interest 

1   to  5   shares,   according 
to    salary.     $1    weekly    per 
share 

8%  dividends  begin  at 
once 

Copyright  1922,  Meyer  Bloomfleld  and  Daniel  Bloomfleld— All  rights  strictiy  reserved 


TYPE  n.    SOLD  AT  PAR—Continued 


CONCKRN 
Dat«  Plan  Bstablished 

EUGIBIL.ITT 

(Reqairements) 

STOCK  OFFEBED 

TEBMS  OF  PAYMENT 

TEBMS  OF  REDEMPTION 

CONTBDBUTION 
OF  FIBM 

BEMABKS 

American    Ia    France 

Fire  Kn^ine  Co. 

(Elmira,  N.  Y.) 
Sept.  1,  1920 

3  months'  service 

Preferred      non-as- 
sessable     cumulative 
7%  stock 

[7,500  shares] 

Maximum   30   shares. 

Minimum  $1  weekly  or  $4 
monthly    per   share.     Two- 
year  limit  to  pay 

Payments  returned  plus 
5%  interest.  Stock  must  be 
sold  to  firm  at  120  plus 
accrued  dividends 

10%    of   amount 
of        subscription. 
$3        per        share 
yearly  for  5  years 
if     stock     is     re- 
tained and  "prop- 
er interest"  shown 

5%     interest     on     un- 
paid balances.  Dividends 
credited.     Par  is  100 

E.  I.  Dn  Pont  de  Nemours  *  Co. 

Nov.,  1920  [revised  plan] 
35%   subscribers 

1   year's   service 

Non-voting:  6%  deb- 
enture stock 

Installment  payments  ar- 
ranged for 

Rate  of  "serv- 
ice   payments"*— 

1  to  2  years— 1% 

2  to  4  years— 2% 
4  to  7  years— 3% 
7  or  over — 4% 

"Guarantee    par    100" 
Extra       "participating 
payments"   if   net   earn- 
ings are  over  8% ;  8  to 
9%,  1%,  etc.    12  or  over 
—5°/ 

Great  Northern  BaUwaj  Co. 

(St.  Paul) 
1900 

Maximum  salary  $3000 
3  years'   service 

11,880  shares 

$10     shares      in      "Great 
Northern  Employees'  Invest- 
ment Co.,  Ltd." 

Firm  bears  ex- 
penses of  man- 
agement 

Cleveland  Worsted  MiUs  Co. 

1905 
5,000  employees 

1  year's   service 

5°/   down.     Personal  note 
with  5%    interest 

If  sold  within  3  years, 
company  has  option  at  105 

Penton  Pnblishinir  Company 

(Cleveland,  0.) 
1917 
200  employees 
72  subscribers 

2   years'   service 

Second       Preferred 
guaranteed  8%    stock 
[2,000    shares,    375 
subscribed] 

Allotment     according     to 
salary.      Maximum    10%    of 
salary.     10   equal    monthly 
payments 

Fund  of  10%  of  outstand- 
ing stock  maintained  for 
taking  it  up 

6%  Interest  on  unpaid 
balances 

Boss   Mannfactarinir    Ca. 

(Cleveland,  O.) 
1915 
190  employees 
00%   subscribers 

1   year's   service 

Common 

1  year's  service 
5  shares — $1  weekly 
2-10    shares— $2    weekly 
3-20    shares— $4    weekly 

Payments  returned  plus 
accrued   dividends 

10%    dividend   guaran- 
teed  for  5   years;   cred- 
ited on  unpaid  balances 

National  Carbon   Company 

(Cleveland,   O.) 
June  9,  1916 

None 

Common 
[5,000   shares] 

According  to  salary  pay- 
ments in  3  to  5  years.  Min- 
imum    1%     monthly,    maxi- 
mum, 1-3  In  1  year 

Payments  returned  plus 
4%   interest 

$5  per  share 
yearly  for  5  years 

Dividends  credited.  4% 
Interest  on   unpaid   bal- 
ances 

Crane    Co. 

(Chicago) 

None 

;^0.000,000    cumula- 
tive 7%  preferred  of- 
fered 

["Large        amount 
sold"] 

Monthly  payments 

"Rebates  based 
on  length  of  serv- 
ice" 

Dividends      begin      at 
time  of  subscription 

General  Electric  Company 

30,000  subscribers 

None 

Employees'   7%    in- 
vestment   bonds,    se- 
ries of  1921   ($10,  $50, 
$100,  $.500,  $1,000) 

50  cents  employee's 
subscription    stamps, 
20  exchanged  for  $10 
bond.         Maximum 
$1,000 

$10   bonds,   cash 

Others:    50    weekly    pay- 
ments, 10  monthly  or  quar- 
terly.    Maximum  $1,000 

Must  be  returned  for  re- 
demption within  six  months 
after  leaving  firm 

Copyright  1923,  Meyer  Bloomfleld  and  Daniel  Bloomfleld— All  ri^lits  strictiy  reserved 


TYPE  n. 

SOLD  AT  PAR     Concluded 

CONCBBN 
]>at«  Plan  EstabUshed 

EI^GIBILJT¥ 

(Requirements ) 

STOCK  OFFBKED 

T£BMS  OF  PAYAfKNT 

T£BMS  OF  B£D£MPTION 

CONTRIBUTION 
OF  FIRM 

BEHfARKS 

Pilgrim  Steam  LAundry  Co. 

Oct.  18,  1921 

313  employees 

3   months'   service 

2,000  shares 

Minimum,  2   shares,   may 
be    paid    at    once,    or    part 
down,     and     minimum,     50 
cents  per  share  weekly.     1 
year  to  pay  up 

Payments  returned  on 
leaving  before  paying  up. 
Firm  has  option  on  repur- 
chase at  "fair  and  reason- 
able price" 

No      dividends      until 
paid  up.    Sold  at  25 

American    Trtephone    * 

Telesrraph  Co. 
May  1,  1921 
[See  other  plana,  Type  III] 

6   months'   service 

1  share  for  each  $300  of 
annual     salary.     Maximum 
50  shares  a  year.    $3  month- 
ly per  share  from  salary 

Payments  returned  with 
4%  interest  quarterly  if 
subscription  agreement  is 
sold  or  pledged,  8%  on 
death,  6%  on  leaving  or 
withdrawal 

Par    is    100.      Interest 
at  8%  quarterly  on  pay- 
ments ;      no      dividends 
while  paying 

Deere   *   Co. 

(MoUne,    lU.) 
INov.  1,  1919 

1  year's  service 

7%  cumulative  pre- 
ferred 

[5,000  shares] 

Maximum  25  shares  (also 
annual  salary).    $2  monthly 
per  share 

Payments  returned  plus 
5%  interest 

$3  per  share  an- 
nually 

Dividends  credited.  5% 
interest  on   unpaid  bal- 
ances 

Tellinff-Belle  Temon  Co. 

American    citizenship 
1   year's   service 

Common 

1  year's     service— 6%      of 
year's  salary 

2  years'    service — 6% 

3  years'    service — 7% 

4  years'    service— -8% 

5  years'    service — 10% 
10°/  down,  10%  monthly 

Payments  returned  plus 
6%   interest 

6%  interest  on  unpaid 
balances.    Dividends 
credited.     Par  20 

Noyes  Bros.  *  Cutler,  Inc. 

6  months'  service 
For  executives  only 

$100,000 

"Managers'    stock" 
(amount   fixed   an- 
nually) 

Maximum  amount,  annual 
salary.    $5  or  $20  per  share 
weekly 

" 

$1  par,  issued  in  vary- 
ing amounts 

Boyerofters 

(East  Aurora,  N.  Y.) 
1919 
300  employees 

50%  subscribers 

Preferred 

20%  down,  11  or  $2  weekly 

8%  dividends.     Par  50 

> 

C.  Jk  O.  Cooper  Co. 

500  employees 
[Plan    withdrawn]               ^ 

Preferred 
(500  shares) 

Minimum      $5      monthly. 
Maximum    25%     of    annual 
salary.    2  years  to  pay  up. 

Stock  callable  at  par  plus 
accrued   dividends. 

Payments  returned  plus 
7%  interest 

$3  per  share  an- 
nually for  5  years, 
in  cash,  or  collect- 
ed on  unpaid 
stock 

Par  100.     6%    interest 
on  unpaid  balances.    7% 
dividends   credited 

• 

Copyright  1922,  Meyer  Bloomfleld  and  Daniel  Bloomfleld — ^All  rifrhts  strictly  reserved 


TYPE  in.     SOLD  AT  A  DISCOUNT 


CONCERN 
Date  Plan  Established 


American    Telephone   * 

Telegraph  Co. 
Jan.  1,  1915 
78,500  eligible 
34,000    subscribers 

March   1,   1916 
[See   later   plan,    Type   II] 


American  Woolen  COk 

May,    1921 


ElilOIBIIilTY 

(  Requirements  ) 


2    years'    service 


2    years'    service 


None 


Boston  Woven  Hose 

ft  Rubber  Co. 
Jan.  1,  1918 
1,400  employees 


Brier  Hill  Steel  Co. 

(Yoangstown,  O.) 
Dec.  14,  1920 


Samuel   Elman   Co. 

(Schenectady,  N.  T.) 
Feb.,  1920 
200  subscribers 


General  Eleeirie   Co. 

Nov.,   1920 


B.  F.   Goodrich  Co. 
July  1,  1920 


Minimnm    salary 

$1,200 
2  years'   service 


None 


None 


2  months'  service 


3  months'  service 


STOCK    OFFERED 


33,000  shares 


Common 


Common 
[500  shares  yearly 
for  5   years] 


Common 
(15,000  shares) 


Common 


Common 


TERMS  OF  PAYMENT 


$2  per  share  monthly 


$3  per  share  monthly. 
1  share  for  each  $300  of 
salary.  Maximum  10  shares 


$1      per     share      weekly. 
Maximum  20  shares 


Allotment  according  to 
salary  and  length  of  serv- 
ice. May  take  50%  of  allot- 
ment. 10%  or  5%  of  salary 
deducted 


5  to  45  shares,  according 
to  salary  (under  $1,500,  5 
shares).  50  cents  per  share 
monthly  deducted  from 
wages.  Maximum  payment 
25%  of  wages.  3  years  to 
pay  up 


10%    a    yeaih- weekly 
annual  payments 


or 


$1  per  share  weekly  or  $4 
monthly.     1  to  10  shares 


1  share  for  each  $300  of 
annual  salary.  25  cents 
weekly  or  $1  monthly  per 
share.    4  years  to  pay  up 


TERMS    OF   REDEMPTION 


Payments    returned    plus 
4%    interest 


Balance  paid  in  returned 
with  5%  interest  on  demand 
or  on  leaving  firm.  6%  in- 
terest allowed  in  event  of 
death 


Payments  returned  on  de- 
mand or  on  leaving  firm 
plus  5%  Interest.  [In  some 
cases  plus  part  of  differ- 
ence between  purchase  and 
market  prices] 


Balances  paid  in  returned 
plus  5%   interest 


Payments  returned  on 
leaving  firm;  stock  must  be 
given  up 


Payments  returned  plus 
7%  interest  on  demand  or 
on  leaving  firm 


Payments    returned    plus 
6%    interest 


CONTRIBUTION 
OF    FIRM 


$12.50  per  share 
after  5  years' 
ownership  and 
•'proper  interest 
shown  in  firm's 
welfare" 


Bonus  for  em- 
ployees remaining 
with  firm  and 
holding    stock : 

1  year  —  $1 
per  share 

2  years— $2.50 
etc. 

5  years — $3 


Bonus  for  em- 
ployees remain- 
ing with  firm  and 
holding  stock: 

1  year  —  $1  per 
share 

2  years — $2,  etc. 
5  years — $5 


REMARKS 


$6  discount.  Dividends 
credited.  4%  interest  on 
unpaid  balances 


$9 
11& 


discount.     Sold   at 
Dividends    credit- 


ed.    4%    interest  on  un- 
paid balances 


Dividends  credited.  5% 
interest  on  unpaid  bal- 
ances.   Sold  at  66.50 


Stock  not  property  of 
employee  for  5  years. 
Dividends  credited.  5% 
interest  on  unpaid  bal- 
ances. Sold  at  4/5  of 
market  price 


Dividends  credited.  5% 
interest  on  unpaid  bal- 
ances 

Sold  at  27.  No  guar- 
antee of  future  divi- 
dends or  value  of  shares 


"Value  $100   a   share" 
— sold  for  80 


Dividends  credited.  In- 
terest charged  against 
unpaid  balances.  Dis- 
count of  20  (from  136 
to  116) 


Dividends  credited. 
6%  interest  on  unpaid 
balances  [Price  fixed 
by   company] 


Copyright  1922,  Meyer  Bloomfleld  and  Daniel  Bloomfleld — ^All  rlirhts  strictly  reserved 


TYPE  m.     SOLD  AT  A  DISCOUNT— Continued 


CONCERN 
Date  Plan  Established 

ELIGIBILITY 

(Requirements) 

STOCK    OFFERED 

TERMS   OF   PAYMENT 

TERMS    OF    REDEMPTION 

CONTRIBUTION 
OF    FIRM 

REMARKS 

Imperial  Oil,  I.td. 

(Toronto) 

April,   1920 
6,000  employees 

1  year's  service 

Definite  amount  at  regu- 
lar intervals  for  12  months 

(a) — Depositor    less    than 
2  years    —    cash    or    stock 
plus   6% 

(b) — 2   to   5  years — stock 
plus    6% 

(c) — Over    5 — stock    plus 
firm's  contribution 

50%  of  employ- 
ee's deposits 

Market    price    125-135. 
Sold  at  75.     Price  fixed 
annually 

I^hlsh  Coal  *  NaTlgation  Co. 

Jan.,  1921 

None 

2.500  shares 

Under     $1,300     yearly,     2 
shares,  over  $1,500  5  shares. 
Minimum  $5  monthly 

Payments    returned    plus 

4% 

$2  annually  for 
5  years  if  stock 
is  retained  and 
employee  remains 
with  firm 

Dividends  credited.  4% 
interest  on   unpaid   bal- 
ances.    Sold  at  65. 

Lincoln  Motor  Co. 

(Detroit,   Mich.) 
April  1,  1920 

None 

Class  A  (5%  cumu- 
lative,   generally    no 
vote) 

Allotment    by    Ann.      $5 
per   share  down.     $1   mini- 
mum per  share  monthly 

Payments    returned    with 
balance  if  stock  is  sold 

Par    Is    50 
Sold  at  40 

Schnlte  Retail   Stores   Corp. 
Dee.  1,   1920 

None 

Common 
^8,000   shares) 

40 — ^Ist     year 
46— 2nd    year 
52 — 3rd    year 
58— 4th     year 
64 — oth    year 

Sold  at  40 

10%  dividends  guaran- 
teed for  4  years 

Standard  Oil  Co.  of  New  Jersey 

Jan.  1,  1921 

1  year's  service 

Common 

Regular      deposits      into 
fund  held  by  trustees  (max- 
imum 20%   of  salary) 

Payments      returned      on 
demand  or  on  leaving  firm, 
plus  6% 

50%  of  employ- 
ee's deposits 

Price  fixed  annually 

1921—155 

Par  is  25 

United   States   Steel   Corp. 
1903 
225,000   employees 
66,311   subscribers 

None 

Common 

(1903  -  1909       pre- 
ferred.    1909  -  1916— 
both) 

[186,600  shares  sub- 
scribed] 

1  to  15  shares,  according 
to    salary.      $2    per    share 
monthly    minimum.      Maxi- 
mum 25%   of  salary 

Payments    returned    plus 
5%  interest 

$3  yearly  for  5 
years 

Sold  at  "Usually  a  lit- 
tle  less  than   prevailing 
market      price."       Divi- 
dends  credited.     5%    in- 
terest   on    unpaid    bal- 
ances 

Wheeling:  Steel  Corp. 

(Wheeling,    W.    Va.) 
AprU  1,  1920 

None 

Common 
(8,000   shares) 

1  to  15  shares,  according 
to  salary.     From  $3  to  25% 
of  salary  per  share  month- 
ly.   3  years  to  pay  up 

Payments    returned    plus 
6%    interest 

$4  yearly  for  5 
years 

Sold  at  80.     Dividends 
credited,  6%  Interest    on 
unpaid   balances 

Atlas  Powder  Co. 

(Philadelphia,    Pa.) 
1920 

None 

Preferred 

Maximum,   30   to   40%    of 
annual  salary 

$2  yearly  for  5 
years 

Sold  at  91.     5%   inter- 
est on  unpaid  balances, 
computed   monthly 

Dutchess    Bleacheries,    Ine. 

(Wappinger  Palls,  N.  Y.) 
1920 

None 

7,000   of   the    27,000 
outstanding    shares 

$10  down  and  $1  weekly 
per  share 

Sold  at  40,  or  20%  be- 
low   market.     6%    inter- 
est on  unpaid  balances 

Cleveland   Hardware   Co. 

1912    (revised    1918,    1919,   1920) 
2,500    employees 
3%    subscribers 

"Executives      and 
employees  in  respon- 
sible  positions" 

10  semi-annual  payments 

Payments      returned      on 
leaving.     Firm  may  rescind 
contract    and    return    pay- 
ments 

New    contract    drawn 
for    each    sale.      6%    in- 
terest on  unpaid  balances 

CopyTlg:ht  192S,  Meyer  Bloomfleld  and  Daniel  Bloomfleld — All  rights  strictly  reserved 


TYPE  m.     SOLD  AT  A  DISCOUNT— Concluded 


CONCERN 
Date  Plan  £stabUshed 

KT.IOIBII.ITY 

(Requirements) 

STOCK  OFFERED 

TERMS  OF  PAYMENT 

TERMS  OF  REDEMPTION 

CONTRIBUTION 
OF    FIRM 

REMARKS 

YooavstowB  Sheet  *  Tabe  Co. 

"Selected    manage- 
rial employees" 

Common 

10%  down,  90%  during  2 
years 

Payments  returned  plus 
10%   dividends 

Bmployees     agree     to 
remain  with  firm  for  2 
years.     Dividends    cred- 
ited.  6%  interest  on  un- 
paid balances 

E.  I.  da  Pont  de  Memours  A  Co. 

1920 

2  years'  seryice 

Non-voting    deben- 
ture (9,000  shares) 

3  to  6  shares,  according 
to  salary.  Minimum,  $3  per 
share  monthly 

Payments  returned  with 
stock  bought,  less  interest 
due 

(}uarantee  of  f9 
dividends     for     5 
years   to   employ- 
ees holding  stock 

5%   interest  on  unpaid 
balances.     Sold  at  93 

American  RoUiay  MiU  Co. 

1020 

1  year's  service 

Common 

1  to  130  shares,  according 
to  salary.  $1  minimum  per 
share  monthly.  4  years  to 
pay   up 

Payments  returned  with 
6%  Interest 

Par  Is  50.    Sold  at  47. 
Dividends   while   paying 
applied  to  discount  and 
6%    interest    on    unpaid 
balances 

TYPE  IV.     GIVEN  TO  EMPLOYEES 

CONCERN 
I>ate  Plan  EsUblished 

ELIGIBILITY 

(Requirements  ) 

STOCK   DISTRIBUTED 

TERMS    OF 
REDEMPTION 

REMARKS 

Baker   Mtg.   Co. 

(Eransville,    Wis.) 
1S09 

150  employees 

4500       hours'       service. 
Must   not    bave   sold   any 
stock 

Common 
[1768,000  from  1900  to  1919] 

Stock  left  on  deposit  with  firm. 
Firm  may  buy  if  employee  works 
for    competitor,    works    for    an- 
other for  5  years,  or  goen  into 
business  for  himself 

After  paying  5%  dividends  and  10%  sinking  fund, 
profits  divided  50-50,  and  distributed  in  proportion 
to  earnings,  90%  in  stock. 

Brooklyn   Sdison    Co. 
Dec.  12,  1910 

3100  employees 
32%  subscribers 

2  years'  service 

Profit-share    certain    percentage    of    wages.      Re- 
ceives after 

2  years'  service — %   dividends 

3  years'  service — V^   dividends 

4  years'  service — %   dividends 

5  or  more— full  dividends 

Stock   credited   for  3   years.     Credits   forfeited   if 
discharged    for    misconduct     or     leaving    without 
month's    notice.     Allowance    for    exceptional    cases 
(death,  etc.). 

Boeton  Consolidated  Gas   Co. 

1,357  employees 
839  subscribers 

"Selected   employees,   at 
least  6  months'  service" 

Preferred        Stock        of 
Mass.   Gas   Co. 
r$761,612.26    in    14    years] 

Shares  not  to  be  sold  without 
approval  of  directors 

Profit-sharing  dividends  credited  toward  shares  of 
stock 

nennlson    Mfg.   Co. 

(Framingham,  Mass.) 

(a)  18  years   of  age,   2 
years'  service 

(b)  7  years'  service  and 
$1200    salary    or    6    years 
and  $1500,  or  5  years  and 

$1800 

"Employees'     Industrial 
Partnership   Stock" 

"Managerial    Industrial 
Partnership   Stock" 

Must  be  turned  in  on  leaving 
firm   for   cash   or  2nd   preferred 
(1  share  for  10  of  I.  P.) 

I.  P.  stock  distributed  according  to  length  of 
service. 

I.  P.  stock  loses  votes  if  preferred  stocks  are  in 
arrears  four  years 

Averajre  cash  dividends  on  I.  P.  stock,  9%% 

I.  P.  stock  issued  at  par,  10.  Non-assignable  and 
non-transferable 

Copyright  1932,  Meyer  Bloomfleld  and  Daniel  Bloomfleld — ^AU  rights  strictly  reserved 


TYPE  IV.     GIVEN  TO  EMPLOYEES— Continued 


CONCERN 
Date  Flan  Established 

ELIGIBILITY 

(Requirements) 

STOCK    DISTRIBUTED 

TERMS    OF 
REDEMPTION 

REMARKS 

Glen-Geiy  Sbale  Brick  Co. 
(Reading,  Pa.) 

If    employee    dies    within    10 
years,  firm  will  buy  back  stock 

$100  share  given  each  employee  annually   for  10 
years.     Dividends  paid  on  $100  first  year.  $200  sec- 
ond, etc. 

Harvard   Knitting  MIUs 

(Wakefield,    Mass.) 
Jan.  1,  1920 

800  employees 

1  year's  service 

"Certificates  of  ownership" 

Holdings  cashed  on  discharge. 
Within  1  year  If  leaving  volun- 
tarily 

50 /o    of    profits   credited    to    "employee- partners," 
half-paid  In  cash,  half  in  certificates  paying  "a  high 
rate  of  interest" 

Henry  A.  Dix  *  Co. 

(New   York) 
April.  1920 

Managers,      department 
heads  and  foremen 

Common 
($100,000) 

10%    dividends    guaranteed.     Annual    bonus    20% 
cash,  80%  in  stock 

International    Harreoter    Ca. 

Jan.  1,  1920 

Jan.  1,  1920 

(a)  Executive  and  man- 
agerial positions.  1  year's 
service 

(b)  Non     -     executive 
workers.    1  year's  service 

Common 
Preferred    7%    cumulative 



Extra  compensation  of  20%  of  all  profits  over  7% 
paid  yearly,  half  in  cash,  half  in  stock 

40%  as  above,  half  in  cash,  half  stock.     May  use 
cash   bonus  to  buy  preferred   stock.     Smaller  pay- 
ments   allowed    to    accumulate    to    $100    with    7% 
interest 

I4wkia  Co. 

(Buffalo,  N.  Y.) 
Joly,  1919 

Chosen  by  directors  for 
interest   shown. 

[Must  be  21   years  old, 
American    citizen    and    in 
service  3  years] 

Common 
(110.000,000) 

On  leaving  firm  (except  retire- 
ment) must  (a)  sell  stock  to  firm, 
(b)  take  6%   note  of  firm  for  6 
months,    (c)     exchange    for  2nd 
preferred  if  firm  desires 

Employees  eligible  receive  stock  equal  to  one-tenth 
of  annual  salary  times  number  of  years  less  3  he 
has  been  employed 

May   also    buy   common  stock  to  20%    of  annual 
salary 

M.  liOwensteln  Mi  Bona,  Inc. 
(New  York) 
July  1,  1920 

3  years'  service.  "Others 
who    in    firm's    judgment 
merit  reward" 

First  Preferred 
($100,000) 

Stock  held  in  trust  until  Oct.  1,  1922.    Forfeited  if 
employee  leaves  firm   before  date.     Delivered  to  es- 
tate if  he  dies,  or  to  woman  marrying. 

New  HaTon  Gas  Uflit  Co. 

April,  1907 

625  employees 

Approval     of    executive 
officers  and  board  of  trus- 
tees. 

7033  shares  issued,  3394 
retained      by      employees 
still  with  firm 

Request  that  stock  be  offered 
to  firm  first  if  sold 

8%    profit  sharing    quarterly    in   form     of     credit 
changed  to  stock  as  soon  as  large  enough.    50%  re- 
duction if  profit-sharing  dividend  is  taken  in  cash. 

Ptttsbnrgli,  Bntier  *  Harmony 
ConsoL  Bailway  *  Power  Ca. 

400  employees 

None 

Common 
($1,000,000) 

Stock  held  as  a  trust  fund.     Dividends  divided 
equally  among  the  employees.    Voting  power  of  stock 
remains  with  president  of  company,  but  employees 
elect  three  directors 

Beaay    Electrie    Co. 

(Anderson,  Ind.) 
April,  1920 

"140   of  the   older   em- 
ployees" 

• 

$140  to  $170  shares  of  General  Motors  stock,  to  be 
delivered    in    1    year.  Annual    bonus    to    older   em- 
ployees 

/ohn  B.  Stetson  Co. 

(Philadelphia) 
1902 

25%    subscribers 

- 

6000   shares 

On  leaving    firm,    receives  as 
much  as  par  value  has  accrued 

Paid  for  by  profit-sharing  dividends  In  5  years, 

IJ®°.£S??  *?  x*'""'  '®'  ^®  y®*'8  (employee  receiving 
the  dividends) 

Copyright  lft»,  Mejer  Bloomllold  sad  Daniel  Bloomfleld— AU  rights  strictly  resenrod 


COLUMBIA  UNIVERSITY  LIBRARIES 

.  This  book  is  due  on  the  date  indicated  below,  or  at  the 
jexpiration  of  a  definite  period  after  the  date  of  borrowing, 
las  provided  by  the  library  rules  or  by  special  arrangement 
with  the  Librarian  in  charge. 


>ATE  BORROWED 


DATE  DUE 


9Hti9im 


DATE  BORROWED 


DATE  DUE 


J 


J 


128  (661)  50M 


COLUMBIA  UNIVERSITY  LIBRARIES 


0041407334 


Bloomfield  &  Bloomfield 

Stock  participation  plans  for 


•tA^_saa4iB 


MAR  2  81994 


/^5//  OO^^r 


^ 


# 


ir 


,/^:2ik-l 


ml 


^- 


END  OF 
TITLE 


